What Expenses Should I Expect When Buying a Home

Its your first time buying a home and you're all excited, but let's look into some of the expenses its going to take to buy one.

Home Inspection- depending on your area in Michigan an inspection can run from $300-$500

The home inspection is a necessary expense to save yourself from future unaware damages.

Earnest Money deposit- money given to show seriousness in buying in the offer, usually $1,000 but can range from anything you want practically. Will get deposit back as long as deal doesn't fall through because of your end. Like not getting clear to close in time by the closing date, and the deal falling through.

Home Insurance- a mandatory purchase to protect your home from future hazards, the average annual premium in Michigan is $1,292, but can be different for every home. Some might need to add on extra coverage plans.

Real Estate Commission- Almost every time you use an agent as a buyer, you won't be paying commission. Generally the seller pays the 6%, 3% for the buyers agent and another 3 for the listing agent. Unless the seller is FSBO and refuses to pay it, then it may be up to you to pay the 3%.

CLOSING COSTS

Down payment- whatever % required for loan type

Appraisal fees- depending can range from $250-$400

Loan origination fee- Cost of processing your loan range 0.5%-1.0% of loan amount

Title Search- confirms property free of liens and you're the owner typically up to $600

Title Insurance- included in closing costs, typically 0.5%-1.0% of homes purchase price

Escrow Deposit- some lenders require 12 months of property taxes and home insurances to be placed into escrow account at closing.

Points- Any points that may be on your loan. 1 point = 1% of home loan

Processing fee- 0.5%-1.0% of loan amount, used for application of loan

Property Tax- you may be required to pay property tax within 60 days of owning your home

Survey Fee- checking property lines of home. anywhere from $50-$500 depending on size (could get even higher with huge pieces of land)

Underwriting Fee- fee for verifying information.

Credit Report Fee- fee for pulling credit report

Generally closing costs range from 3%-5% of loan amount

SEV TAX INCREASE- (State Equalization Value) One expense about buying a new home is the change in property taxes, they could be higher than before or lower. Your Real estate Agent will explain the change and what you'd be paying.

Moving Expenses- Now that you have the home, there are other random expenses such as buying furniture, internet and moving truck expenses. These can range differently for everyone, just make sure you still have some leftover to actually move in!