Buying a new house is a huge undertaking, especially when you consider all the effort that goes with it. You’ll have to be prepared physically (to drive around and look at different houses), mentally (when figuring out house conveyancing fees and other payments), and even emotionally (when deciding which house to buy). Though it may sound like a lot of hard work, the result is a fresh home where you and your family can build a new life.
Being financially prepared is one aspect that any new homebuyer should not take for granted. Here are some of the fees you should know:
1. Homeowner’s Insurance
This is required when you take out a home loan and in most cases, needs to happen before closing the sale. It involves insurance for personal liability as well as hazard insurance that cover the house and all its contents. Make sure you fully understand your coverage by reading your policy carefully.
2. Private Mortgage Insurance
This insurance provides protection for the lender in case the borrower doesn’t meet their legal obligations. This is usually required for down payments that are less than 20%. Sometimes, it can also mean requiring you to make a full year’s payment at the time of the purchase.
3. Title Insurance
This insurance covers you if the seller wasn’t the actual owner of the house you bought, or if any information on the title was not true. Usually, this is verified before buying the house, which protects either the lender or the buyer from any loss due to a conflict that will arise over the ownership of the property.
These are only some of the many fees involved in purchasing a new home. Some may be waived or required, depending on the lender or seller. What’s important is to understand what all the possible fees are and what they’re for.