As you may already know, there are a number of costs on top of the purchase price of a home that you must figure into your calculation of affordability. These extra costs, such as taxes and fees, could surprise you with an unwanted financial scare on closing day if you’re not informed and prepared.
Some of the costs are one-time fixed payments, while others are ongoing monthly or yearly commitments. Note that not all of these costs will apply in every situation when you buy here on Sanibel, however, we think it’s better to know about them ahead of time so you can budget accordingly.
Remember, buying a home is a major milestone. The last thing you need are un-budgeted financial obligations popping up hours before you take possession of your new home. So, we suggest reading through the following checklist to make sure you’re budgeting properly for your Sanibel home purchase.
1 – Appraisal Fee
Your lending institution may request an appraisal of the property which would be your responsibility to pay for. Appraisals can vary in price from approximately $350-$550.
2 – Property Taxes
Depending on your downpayment, your lending institution may decide to include your property taxes in your monthly mortgage payments. If your property taxes are not added to your monthly payments, your lending institution may require annual proof that your taxes have been paid.
3 – Survey Fees
When the home you purchase is a resale (vs a new home), your lending institution may ask for an updated property survey. The cost for this survey can vary between $700-$1,000.
4 – Property Insurance
Home insurance covers the replacement value of your home (structure and contents). Your lending institution will request proof that you are insured as it protects their investment on the loan.
5 – Service Charges
Any new utility that services your hook up, such as telephone or cable, may require an installation fee.
6 – Legal Fees
Even the simplest of home purchases should have a lawyer involved to review all paperwork. Shop around, as rates vary greatly depending on the complexity of the issues and the experience of the lawyer.
7 – Mortgage Loan Insurance Fee
Depending on the equity of your home, some mortgages require mortgage loan insurance. This type of insurance will cost you between 0.5% – 3.5% of the total amount of the mortgage. Usually payments are made monthly in addition to your mortgage and tax payment.
8 – Mortgage Brokers Fee
A mortgage broker is entitled to charge you a fee in order to source a lender and organize the financing. However, it pays to shop around because many mortgage brokers will provide their services free to you by having the lending institution absorb the cost.
9 – Real Estate Broker Fees
Some real estate offices charge a brokerage fee at closing that they don’t always let you know about ahead of time. It’s a good practice to ask your Realtor® about any fees that might occur at the broker level before you get to the closing table.
10 – Moving Costs
The cost for a professional mover can cost you in the range of:
– $100-$150/hour for a van and 3 movers
– 10-20% higher during peak demand seasons
11 – Maintenance Fees
Condos charge monthly fees for common area maintenance such as groundskeeping and carpet cleaning in hallways. Costs will vary depending on the building.
12 – Local Improvements
If the town you live in has made local improvements (such as the addition of sewers or sidewalks), this could impact a property’s taxes by hundreds or even thousands of dollars.
13 – Land Transfer Tax
This tax is applied whenever property changes hands and the amount that is applied can vary.