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I plan to purchase a home in the next two years. What additional costs should I anticipate besides the mortgage?


This question comes up from time to time, probably as it begins to dawn on prospective homeowners just how complicated and expensive buying a home can be. There are numerous legal and financial services that typically must be performed – at a price – during the cumbersome and lengthy sales process, especially when the purchase is done with a mortgage. The services, for which fees must be paid either by the buyer or seller, can include loan origination, appraisal, title search, home inspection and legal advice. Points, which are a percentage of the mortgage amount that a lender demands as an upfront fee in addition to the regular payments called for in the mortgage contract, often must be paid, too, and occasionally the buyer has to pay the remaining portion of the annual property tax bill that the seller already would have paid. The buyer also may have to cover the cost of homeowner’s insurance, title insurance and mortgage insurance. That last one is often required by lenders when the down payment is less than 20 percent of a property’s value; it guarantees that the lender will get its payments if the homeowner defaults.

-Conrad de Aenlle