You were at an open house last weekend, it had an amazing view, the sales agent came up to you and struck up a conversation, “Do you live in the neighborhood?,” she asked. After chatting for a little bit, you grabbed the agent’s card, went to the car, and started driving through the area.
It was really close to the school, a Starbucks was just around the corner from the park, everything was perfect. You went home, checked the interest rates online, and found out you could really buy this place.
This guest post is written by First Team Real Estate agent Paul Monte. Paul works out of the Newport Beach Office and specializes in working with first-time home buyers.
HOLD ON…COST VS PRICE
There are several costs that go into buying a house aside from the listing price. Here are added costs that you need to consider:
The home you were just looking at has what’s called Mello Roos, this is a assessment above your property tax for the area, which would bring your tax base 1.875%.
The price point was an amount over what you were approved at, so instead of putting 20 percent down, you are able to put 10 percent down. In this case you will also be paying principal mortgage insurance or PMI. This is going to add anywhere from 0.5 to 1% of the entire loan amount onto your annual payments that was not calculated in your mortgage calculator online.
DON’T FORGET CLOSING COSTS
In every transaction there are costs for the following: escrow, title, lender fees (for origination and other fees concerning the loan), appraisal fee, and physical inspection fee for the buyer’s inspection. The total fees in “closing costs” you should calculate depending on your situation, on average will be in the range of 2.5%- 2.8% (again this is depending on the loan product you are choosing).
There are many choices in the marketplace, it really does pay to sit down and speak about your situation to a real estate agent, and strategically plan out your purchase.
When I conduct a buyer consultation with all of my clients, we discuss their targets in the following categories: What are your plans in five years? If you had to transfer your job out of state would you like to keep this property that you are purchasing to rent? Are you buying this home as a “move-up” property?
These strategies all lead to 1 mantra of mine that I want you all to remember, “You only buy a house once, but you pay for it every month.”
If you’re considering a home purchase, give me a call at (949) 954-0148 to schedule your personal consultation and buyer planning session.
To view the original article, click here: http://firstteamrealestate.realtytimes.com/advicefromagents1/item/28881-so-you-want-to-buy-a-house-how-much-will-it-really-cost