The price on the tin is not what you pay. With houses, there are lots of hidden costs—even before you move in and realize that you need to pay to have the heating system upgraded because it sounds like Grandpa when he's snoring.
Closing costs are what you pay before you can even unpack your boxes and order your first pizza at home. Here's what you're looking at:
- Advances on property taxes
- Title insurance
- A fee to the person hired by the government to record your mortgage loan
- Surveyor fees
- Attorney fees (for all the paperwork you got a hand cramp signing)
- Mortgage application fees
- Home inspection costs (we hope you spring for these or you might find you need a new roof or replacement floors when you move in)
- Home appraisal costs
- Pre-paid house insurance (in case you're clumsy and start a fire the day you move in)
- Home warranties
- Homeowner association dues (if you live somewhere where you need to pay these so that someone can tell you when your welcome mat is crooked)
- Other fees that seem to crop up out of nowhere
You'll (almost) get used to someone saying "Oh, and you'll also have to pay…"
Some of these costs will make no sense at all. No matter, you still need to pay them. You can take your frustration out on the weeds in your front garden later.
How much can you expect to pay for all these extras? They vary more than Madonna's style choices over the years, but budget for about 2-3% of your house price, at least. On top of these, you'll typically need to pay 5% of your house price in commissions to the realtor who helped you get into this mess in the first place.