Buying a home is a very important financial decision and without thorough research, it may involve a great deal of hidden costs. This is especially a large decision for first time buyers because it is likely they are just starting out in their careers and cannot afford surprise costs. For example, the median price for homes for sale in Monroe, NY is $250,000 for the first quarter of 2014. This is not taking into account closing fees and taxes so it is important to be aware of all costs associated with buying a home. These five tips will help you purchase a house you can afford and avoid hidden costs.
- The first step would be to check the selling price of homes in the area you are interested in. You can use our property search feature to help find homes currently for sale or recently purchased homes for sale.
- Now that you know approximately the selling price of similar homes that you would like to purchase, you can calculate your mortgage payment. There are many services available that calculate your mortgage payment for you taking into account a large variety of factors that you can input such as interest rate and down payment. Use our mortgage payment calculator. For interest rates, you can search Bankrate.com or call up local lenders to see what rates they offer. Currently rates fall around 4% to 4.5% depending on a variety of factors including your credit score. It is wise to check with banks, credit unions and mortgage lenders to insure you are getting the lowest rate possible. In addition, check with government agencies to see if they have lower interest rates. Normally, there are many interest rate breaks for first-time home buyers. The typical down payment is 20%, but if you are able to put more money down, the less you’ll pay in the long term. Lastly, play around with the numbers to see what options are more advantageous such as different term mortgages.
- Some of the costs that are often overlooked are property taxes, school taxes and insurance. There are many financial calculators on the web that can estimate these costs for you, but you should be able to find historical data on property and school taxes for many properties. This will be available through the taxing agency for that area. You can find an estimate for the cost of homeowners insurance on the web or you can call local insurers to get a more accurate estimates. Furthermore, look into the costs of utilities since they are essential.
- Another cost that is overlooked and more difficult to determine is the closing cost. There are many costs included in the close such as title search fees, appraisal fees, attorney fees, et cetera. They usually range about 2.5% – 4% of the selling price. You may call 2 to 3 lenders for estimates, but it is difficult to find an accurate estimate. Closing costs are highly based on location so it is key to contact local lenders or title companies.
- Taking into account all of these costs, home buyers need to see what is practical for their budget. Take the time to calculate all of these costs for a few different homes for sale that you are seriously considering. It is probably best to stay with a fixed rate mortgage so your costs do not change suddenly.
If you are looking for homes for sale in Orange County, NY we serve Warwick, Monroe, Goshen, Chester, Middletown, and surrounding areas. Use our search feature to find homes for sale in the area and locate your next dream house.
If you are a seller, we can help you sell your home quickly and get the most money possible for it. Please contact us today for our expert guidance in real estate transactions.