If you're about to buy a house, you're about to face a multitude of fees. It's valuable to take some time to learn what you'll be paying for. Take a deep breath and read on.
- Points or origination fees: Each point is 1 percent of the mortgage value, and the more points you pay, the lower the interest rate should be. Sometimes a seller might pay the points for you -- ask your buyer broker to look into that possibility for you.
- Escrow fees: Escrow is where the payment for your home will reside while you and the seller get everything settled. There are fees for this service, though. Think of them as room rates at the Escrow Hotel.
- Homeowner's insurance: This is generally required before you can take possession of your new home.
- Legal fees: Not everyone needs the services of a lawyer, but if your transaction is too complicated for boilerplate forms, you'll want an attorney preparing some paperwork.
- Private mortgage insurance: This is required if you're going to offer a smaller-than-usual down payment. You may need to pay up front for as much as a full year's worth of premiums.
- Document preparation fees: These are lender or broker fees.
- Title insurance: This covers you in case the unlikely happens and the person who sold you the house didn't really own it.
- Appraisal fees: This will slap a fair market value on your home -- important for tax purposes and for the mortgage company to approve your loan.
- Credit report fees: A verified credit report will be required.
- Tax service fees: These are to make sure that your taxes get paid.
- Survey fee: A survey will determine the exact boundaries of your property. (If an existing survey can be used, then you won't need to pay this fee.)
- Property taxes: You may owe some property taxes immediately, if the seller has paid them covering a time period when you'll own the home.
- Pest inspection fee: New homes don't normally require this, but older homes do.
- State recording fees: These depend on state requirements.
- Notary public charge: You'll need a notary to verify your identity.
These aren't necessarily the only fees you'll pay, but this list does include most of them.
You'll find more homebuying information and tips in our Home Center. You can learn about refinancing your mortgage, too, and can even find some attractive rates there. Or pop in to the Buying or Selling a Home discussion board, where you can follow the conversations and even get answers to your questions.
And by the way, if thinking about investing makes your head hurt and you'd like an actual person (a financial pro, no less) to talk to about your financial situation, look into our TMF Money Advisor. This valuable service features customized independent advice from a variety of objective financial experts. You need to make sure you're saving enough, and well enough, to meet all your needs. (To take savings matters into your own hands, visit our Savings Center.)