Things to check before purchasing: Part 3
There are other fees involved with your new home purchase. It is wise to make sure you understand the fees involved beyond just the home price. These fees include HOA Fees (which we will discuss further), HOA transfer fees (if applicable), Property Taxes, Association dues, and Insurance. They are all fees that ad up. Most of these items are just part of purchasing, but it is wise to know what they are. Property taxes in some areas are much higher than others. Home Owners insurance can be higher in some areas as well, especially if there’s been a natural disaster.
HOA (Home Owner Association ) fees too can be quite high depending on the property type your looking at. It is important to understand how the fees will be calculated and when they will be due. HOA fees may be due monthly, semi annually or bi annually depending on the way they are assessed and the board rules. It is also important to make sure the governing board of the HOA are honest and managed properly. Of course it is the homeowners who elect the board and vote in those that sit on it, but make sure this will not be a problem for you. HOA fees more likely than not will continue to increase every year. Condominiums may offer a great value in purchase price and a more reasonable mortgage, but often times the fees the HOA fees can add up for these types of properties. The number of people residing in the community will have a direct impact on what you will be charged. So again do your homework.
Of course, there are always fees associated with the closing of a home if a lender is involved as well. These fees are charged by banks, lenders and title agencies and include title fees, loan origination fees, appraisal fees, discount points, and underwriting fees. They can total anywhere from 2.5%-4% of the homes selling price. These additional fees can be payed by you or the seller. Usually they will be included in the buyers loan, unless you have asked the seller to pay closing costs, or half of the closing costs. As far as who ends up paying, it is up to how you have negotiated the purchase. These terms will be outlined in the purchase agreement.
Make sure to understand the fees involved. Always ask questions if you are unsure or just don’t know. The realtor should more than happily explain things to you, or find the right answer for you.