Why has an inspection fee been added to my closing costs? : FirstTimeHomeBuyer
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Similarly, Arkansas has average closing costs of about $2,500 and Indiana has closing costs around $2,100. Depending on where you live, you should determine the average closing costs for your area and plan accordingly as you move forward with purchasing your home. Keep in mind that a salesperson may encourage you to roll the fees into the loan balance to make the deal seem sweeter; but in reality, you’re just paying those fees over time at a higher cost. This is why it doesn’t make sense to serially refinance your mortgage, just like it doesn’t make sense to buy and sell a home over and over and pay costly real estate agent commissions.
Another possibility is to ask your home financing provider if they have any promotions or assistance programs that can reduce your closing costs. Generally, though, closing costs are a fairly unavoidable part of buying a home. Some home financing providers do offer what is referred to as “no closing cost” mortgages, but what you are actually doing is rolling the closing costs into the mortgage. This means you will pay interest on them if you have a conventional mortgage loan.
Should your home inspector be licensed?
Choose a lender that offers low fees and competitive interest rates for lower overall closing costs. As the seller, you’ll also need to bring a little cash to the closing table to finish out the loan. Let’s take a look at some common closing costs sellers must pay to finalize a home sale. With an FHA loan, there is an upfront mortgage insurance premium, plus a monthly MIP fee for the life of the loan unless you make a down payment of 10% or more. USDA loans have an upfront guarantee fee and an annual guarantee fee that function similarly to PMI/MIP.
Again, we can’t emphasize enough the importance of hiring a professional home inspector. The results could change your mind about the purchase or help set up a repair budget. It’s essential to know how much experience a professional inspector has before hiring them.
Closing costs for buyers
If you purchased points to lower your interest rate, you will pay a one-time fee for them at closing. A discount point can lower your interest rate by 0.25%–0.5% — and, just like interest rates, the price of points changes daily. While it may seem attractive to pay for a lower interest rate, it may not be worth it in the long run if you don't plan to own your home for very long or plan to refinance in the future. Find out how real estate closing costs are calculated as a buyer and a seller.
Based on a poll of over 100 certified home inspectors, the average cost for a 1500 square foot house on a concrete slab average $400. If you’re buying a condominium or a property in a planned development, you will be required to join the homeowner association . As a part of joining, you’ll need to pay a fee to transfer ownership from the seller to the buyer. Often, the seller will pay this fee, but it can depend on how competitive the housing market is or what the specific HOA contract dictates. There are a couple of possible ways that you might be able to reduce your closing costs. One, as mentioned above, is by asking the seller to cover the cost if your housing market allows.
What is the average cost of a home inspection?
It can also be used as a deposit toward other closing costs if you pay it earlier. Even if your loan is rejected, the application fee is non-refundable. Not every lender will require an application fee, and the exact amount it will cost will depend on your lender. Sellers usually pay for both the buyer’s and the seller’s real estate agent commissions. Real estate commissions may vary, but the average rate is 5 – 6% of the purchase price. Private Mortgage Insurance, Mortgage lenders will typically require PMI if there is less than 20% down on a new mortgage.
The danger of accepting the home “as-is” is that the buyer assumes the house and any potential home problems. If there are hidden defects the buyer was not aware of, the buyer has no recourse to go back to the seller and ask for repairs. Weather conditions and roof design can affect how the roof is inspected. Ask about the various methods the inspector uses to inspect the roof.
There is a cost via a higher mortgage rate, which equates to a higher monthly mortgage payment. But it can still make a lot of sense, especially if you don’t keep the mortgage for very long. One method is to include closing costs in the mortgage, that is, pile them on top of the loan balance so they don’t have any out-of-pocket expenses. Closing costs cover the fees to pay those professionals for their services. Instead of paying many bills along the way, you will pay them at the end at closing—on the day the home becomes yours. For a first-time VA user, if you put down less than 5% on your loan, your VA funding fee is equal to 2.3% of your total loan value or 3.6% if it’s a subsequent use.
In addition to requiring PMI, your lender may require you to pay the first month’s premium as part of the closing costs. How much this fee will add to your costs will depend on your monthly premium amounts, which is about $30–70 per $100,000 loaned. In some states, you’re required to get an official pest inspection performed before you can officially close on your loan. The average pest inspection costs about $100, and they’ll check for termites, dry rot and more. This fee is sometimes paid by the buyer, seller or lender, so it’s important to work out who will pay it if it’s required.
In most cases, the buyer’s offer is made contingent on a home inspection. This contingency period allows ten days to have the home inspected to verify no significant material defects. To the best of my knowledge, the appraisal still needs to be completed. However, I know the builder-seller still needs to secure a certificate of occupancy. I'll wait to see what my lending officer says and look for other replies to this post, too.
The average cost of a home inspection is $338 according to data from HomeAdvisor, and generally ranges from $300–500. If a purchasing contract includes an inspection contingency, the results of a home inspection can allow the buyer to negotiate with the seller or back out of the deal. Rocket Homes Real Estate LLC is committed to ensuring digital accessibility for individuals with disabilities. We are continuously working to improve the accessibility of our web experience for everyone, and we welcome feedback and accommodation requests. If you wish to report an issue or seek an accommodation, please contact us at icn_external-link_light purple .
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