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If you’re planning on buying a home in Des Moines, the sooner you begin preparing, the better. The better prepared you are, the smoother the process will go. Buying a home is a major financial decision, but there’s much more to it than the price of the house you choose. We’ve put together a list of the other costs you may be expected to cover, so you can be entirely prepared:
It’s no surprise that Realtors work on commission, and if you use one, they will let you know up front what their fee is. It’s usually based on the price of the home you buy.
Loan Origination Fee
If you’re using a mortgage loan to pay for the property, then you’ll also be responsible for paying a fee to your lender to cover their costs. The amount will usually be dependent on both the lender you use and the amount of your loan. Like Realtors, lenders will tell you their fee up front.
Good Faith Deposit
This is a security deposit that demonstrates your intent to purchase the house and is applied to your down payment. It’s held in escrow by the title company until the transaction is complete. The check won’t be cashed right away, so you’ll want to prepare your finances accordingly, and keep in mind that it will be deposited at the close of the transaction.
This may be the most familiar of all the costs associated with homebuying. It will depend on several factors, including the home you purchase, the home’s location, and the loan option you select. Keep in mind that some of the lower down-payment options require mortgage insurance, which could have some impact on your monthly payments.
Some lenders require you to have a home inspection. Whether it’s a requirement for you or not, you should always have an inspection performed by an experienced professional when your offer is accepted. You’ll have options when scheduling an inspection, and some are more thorough than others. The more thorough the inspection, the more costly it will be. An in-depth inspection can save you from unexpected expenses later on, so consider it an investment in your future.
The Closing costs will be disclosed early on in the buying process, and your lender will help you calculate them. This covers things like the lender fee (different from the origination fee), the appraisal fee, title or attorney fees, escrow fees, and prorated interest. It’s common for homebuyers to spend several thousand dollars on these, so you’ll want to learn about them very early on.
Requirements will differ depending on the home you buy, but you’ll want to consider title insurance, homeowners insurance, and maybe separate flood insurance. These aren’t large costs generally, but you’ll want to factor them into your budget.
Property tax can be one of the more considerable expenses that comes with homeownership. They can also adjust over time, with things like renovations causing them to increase.
This should give you a better idea of what to expect when you buy a home in Des Moines. If you prepare in advance, you’ll avoid any surprises and be in better control of your finances.
If you’d like a recommendation for an experienced, local Realtor, or if you need to get preapproved for a mortgage, please reach out to us. We’re always happy to help.