When we hear about hidden costs, we tend to think about lenders who may be hiding their fees. Often times a cash advance lender or creditors are accused of doing such things, but hidden costs are also the ones that are just not talked about that much. A bank does not hide the fact that it will charge overdraft fees. It is a general rule of thumb with no major warning when opening up a new account. A short-term loan lender states the interest rate and lets a person know that the balance will be charged every time a payment date arrives, they just don’t go into details to explain how tough it may be to pay off. This doesn’t forgive those lenders who do sneak in unnecessary charges, but it does scream that we need to pay better attention to where our money is going.
Fees pinch our budgets whether from a cash advance or buying a new home.
When we don’t educate ourselves about the financial decisions we make, there may be many fees or charges which we are unaware of. First time home buyers who are caught up in the excitement of owning their own home may not fully understand what needs to be paid for in order to purchase a home. It seems simple; apply for a loan, loan gets approved, home is purchased, move in! If you have a good Realtor they may suggest applying for a bit more than the actual cost of the home in order to cover all the extra costs in home buying which many people may not be aware of.
- Depending on the size of your down payment, you may need to purchase private mortgage insurance.
- Borrowing money? You will be required to purchase Homeowner’s insurance before the closing.
- Title insurance covers you if the seller didn’t actually own the title of the home.
- Appraisal fees will be paid to obtain the current market value of the home for tax purposes.
- Fees for the escrow account will cover property taxes and insurances.
- An origination fee must be paid to the bank. You think the bank would get out of home sale without collecting?
- Credit report fees. In order for your loan to be approved, you will need to pay to get your credit checked.
- Fees for documentation preparation. You will need to pay the lender or broker for putting all the paperwork together.
- If there is no existing land survey, you will need to pay a survey fee for there to be one.
- If the home is not brand new, often times there will need to be a pest or mold inspection depending on the area in which the home is located.
- If the seller has already paid taxes on the property, the buyer will have to pay for the time period covered once the sale is closed.
- Depending on where you live, your state may charge you to record and hold the sale information.
Now these fees will vary upon location and some may be the responsibility of the seller or buyer depending on the arrangement. The more you understand about the underlying costs prior to purchasing a home, the more equipped you will be to handle it financially. This is true for any financial transaction. Whether you are obtaining a cash advance, opening up a new credit card, applying for a car loan or in this case purchasing a new home, know what fees you are up against. If you come across someone who is not willing to disclose all the information, then you need to find a new resource to help you through it.
