What are the extra costs when you buy a home?

When you buy a home, there are other fees that have to be figured in besides the cost of the loan itself, the down payment and the monthly mortgage payments. Once you sign the sales contract, the closing process begins. This process involves various fees and payment for documents, insurance, and of course the attorney. The closing process is a legal process that finalizes the home sale. Let's take a look at the other costs along the way that can add up to no small amount.

Some of the fees paid in the closing process are required by the lender. These include an appraisal fee to assess the property value, a processing fee for the application, and the access fees for your credit report. Lenders also charge a fee for any additional work the lender has to do, which is called an origination fee. This fee is sometimes a percentage of the loan. Lenders may also require that you pay for an inspection to check the home for pests such as termites, and to make sure the house is structurally sound.


Attorney fees include documentation preparation. Attorney fees also vary and they also depend on the purchase price and the complexity of the sale. Next on the list is insurance. You will have to pay homeowners' insurance and hazard insurance. If your down payment was less than 20 percent, add private mortgage insurance to the list. The cost of transferring the title and deed are another set of fees, such as title search fees and title insurance, and closing taxes vary from state to state. Closing is completed once the documents are exchanged, and the county recorder receives copies, as well. The deed and title are transferred to the buyer.

Some of the closing costs are negotiable, and some depend on lender requirements. The bottom line is that closing costs do add up, and that is something that has to be taken into account from the very beginning of the process.