There are many fees associated with buying a home other then the purchase price. It is important to know what all the fees so you are prepared. Here are the top 5 fees associated with buying a home (**This does not mean these are the only fees these are the top 5**).
- Downpayment; This is one of the most common fees in purchasing a home. Your down payment will vary based on what loan program you are using. Some loan programs will require anywhere from 3-5% of the purchase price to put down and other programs will be 1% and some programs you may not be required to put any money down. Check with your lender about the different loan programs and decide which loan program you are going with so you can make a budget.
- Earnest Money; This typically is about 1% of the purchase price however, the amount can vary based on your negotiations. Earnest money is a way to show the seller you are serious about purchasing their home. Giving earnest money in the amount of 1% of the purchase price would be a good amount to show your level of interest. For example, you are offering to purchase a home for $200,000, 1% would be $2,000 in earnest money. In negotiations you can raise the amount of earnest money to show the seller you are more serious and may help to get an accepted contract. Earnest money is typically due upon acceptance however, your contract should state when your earnest money will be due.
- Closing costs; Closing costs for a buyer are typically anywhere from 1%-5% of the purchase price. There are some variations in the costs depending on where you are purchasing. Some municipalities have transfer tax you need to pay to transfer the title into your name. However, some do not require this tax. Every title company has a different fee for closing also, so that number can vary as well.
- Home inspection; The cost of home inspections can vary depending on how many inspections you are going to have. There are many different inspection; traditional home inspection, Radon, Mold, lead based paint, termite, structural, and well and septic inspections. Your typical sale will consist of a traditional home inspection and radon. In Illinois, the average cost for a home inspection can range from $250-$500. The cost of the inspection depends on the size of the house. The radon inspection in Illinois can range from 250-400, again depending on the size of the house, if there is a basement, if there is a crawl space, etc.
- Moving costs; As you can imagine moving costs can vary greatly. If you decide to do all the moving yourself then the cost is minimal. But if you hire a company to move everything for you this could cost anywhere from $25 to $50 per hour.
As part of your closing costs (the 1-5% of the purchase price) you will have lending fees. Here is some information about lending fees from one of my preferred lenders, Linda Winge. If you have any further questions about mortgages you can reach Linda by clicking here.
If you would like to talk about anything further real estate related you may call/text me at 708.268.0462 or e-mail me here.