The Millstone Times March 2020

REAL ESTATE Get to know the costs and terms when buying a home By, Lauren Kowlacki

The listing price on a home is just the start of expenses a home buyer will incur. Even though a pre-qual letter from a bank designates that a buyer is okay to purchase a home in a specific price range, there are many additional fees a home buyer will face and may not be prepared for.

Whether you are a first time home buyer, have had recent life changes or are looking to purchase a vacation home, here are a few reminders on savvy budgeting for a new home. Down Payment A down payment is typically the largest lump sum of money put down when purchasing a home, but that amount does go towards building equity in your new investment. Mortgage Payments Monthly payments paid to a bank or lender. Closing Costs Closing costs are lender and third-party fees paid at the close of a real estate transaction. These fees can range anywhere from $5,000 to $50,000 and up and typically include the following: • Appraisal Fee The professional estimate of a home's value. • Survey Fee The cost of verifying a home's definitive property lines. • Wire Transfer Fee The charge to wire funds to purchase the home. • Underwriting and Origination Fees The charge associated with evaluating, verifying and processing the loan application. • Document Prep Fees The cost associated with prepping your loan documents for processing. • Discount Points Paid at the time of the deal to lower the interest rate on your mortgage. • Credit Report Fee The charge for pulling your credit history and scores. • Title Insurance A policy that protects you in the case the seller doesn't have full deed and authority to the property. • Recording Fees Government fees for entering new property records. Real Estate Agent Commission Typically 5-6% of the home sale price, split 50-50 between the buyer's agent and seller's agent. Property Taxes Typically a quarterly or bi-annual payment made to the local government. The amount can fluctuate over time based on municipal projects as well as an increased assessed value of a home based on renovations or overall market conditions. Homeowners and Flood Insurance Insurance rates vary by state and region, but many Jersey Shore properties require flood insurance in addition to standard homeowners’ insurance. Homeowners Association, Co-op or Condo Fees Homes in shared spaces like condos and co-ops have a month assessment that pays for improvements to the entire complex. These can include things like landscaping, painting and building-wide utilities for features like elevators and community pools. Utilities Home utilities can range anywhere from $200 to $1,000 and more each month depending on the size on the home. Utilities include heating and cooling, water, trash services and basic utilities like cable and internet.

26 The Millstone Times

March 2020

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