Before you even think about buying a home for sale in Northville, Michigan, why not have a look at your financials. Most people believe that the mortgage loan they will apply for will cover all the costs but there are few fees that you will have to pay out of your own pocket. For this reason, you need to have enough savings, so that you can cover the service charges and the real estate agent’s fees.
We like to call these extra costs as fee myths, which buyers think are not real. So, what is the first payment that you need to have on hand to make an offer?
The down payment!
Here’s some good news: you don’t have to pay a 20% down payment when buying a home for sale in Northville, Michigan. Most lenders ask for a 3.5% down payment that is if you have a clean credit card statement. If your credit score is below 600, then be prepared to pay a minimum of 10% down payment.
Following are the fees explained briefly in order:
1. Appraisal Fee
The appraisal fee is the assurance which the lender needs before giving you the loan. It’s insurance against the proof that the loan amount you are asking for matches the house’s value. This fee costs somewhere between from $200 to $425.
2. Home Inspection Fee
The most important thing to keep in mind is that never let go of a home inspection in return for an incentive. The few dollars you will be saving now will cost you thousands in the future. From assessing leaks and molds to plumbing problems, the HVAC system, roof and gutter, everything comes under this. Do not send an offer until you have the home inspection report in your hand. This fee costs somewhere between from $300 to $500.
3. Application Fee
The application fee is the fee the real estate agent needs to run your credentials for the credit report. It also involves a few other fees, which is why it is important to ask your real estate agent for a final cost and its breakdown. This fee costs somewhere between from $75 to $300.
4. Lender’s Origination Fee
The amount charged on the loan is known as the lender’s organization fees. It includes charges for underwriting the loan, funding the loan and loan application. This fee is usually 1.5% of the loan.
5. Titles Services
A title search allows you to make sure that the home for sale in Northville, Michigan you are looking to purchase is not owned by someone else. Through this process, you can make sure that you are not being scammed. This fee costs somewhere between from $150 to $400.
6. Survey Costs
Want to know about the house’s major features and dimensions then you need to pay fees that’s somewhere between $150 to $400.
7. Tax Service Fee
Taxation fee cost is $50 and is paid to make sure that the tax payment documents are in order.
8. Private Mortgage Insurance
Buyers, who are lucky enough to pay a 3.5% down payment, are subject to pay private mortgage insurance, which can be from 0.3% to 1.5% of the loan. This is an assurity that if you fail to pay back the loan and your house forecloses, the lender will be safe.
So, there you go… home-buying fees that up until now you considered a myth. Before placing an offer on the home for sale in Northville, Michigan, visit Homes2MoveYou. Get in touch with me 248-790-5594 and get the house appraised from experts.