Wondering about common real estate fees? You never want to be blindsided during the process of purchasing a home, so it's always better to know what kinds of expenses you'll need to plan for ahead of time.
Here are 5 of the most common real estate fees:
Home Appraisal fee
This fee is paid to the entity that provides your mortgage. The lender will hire an independent appraiser to examine your desired home to ensure that it's "worth" the amount of money they are loaning you for your mortgage. It is usually about $550.
Mortgage Insurance Application fee
If your down payment will be less than 20% of the total cost of your home, then you will be required to purchase Private Mortgage Insurance, referred to as PMI. This is one of the very common real estate fees because it protects your lender from any potential loan defaults. PMI typically costs between 0.5% to 1% of the loan amount on an annual basis.
Credit Report fee
Having good credit is an essential part of applying for a mortgage and purchasing a home, so expect the Credit Report fee to pop up during the process. Official reports tend to be about $25.
Title Search fee
The purpose of the Title Search fee is to ensure there are no tax liens or delinquent mortgages on the home you wish to purchase. In most states (including here in Maine), the title search can be done by your title insurance company. It will cost anywhere from $300 to $400.
The state of Maine charges a transfer tax to both the buyer and seller at time of closing. The tax is equal to $1.10 per $500 of sale price from both parties. For example, for a $100,000 property both the buyer and seller would be responsible for paying $220.00 in transfer tax ($100,000/$500=200 x $1.10=$220).
The Realtor fee is one of the most common real estate fees and is usually included in the commission fee charged to the seller of the property. The fee is deducted from the final price of the home and is paid to the listing broker (the seller's agency) who then shares it with the buyer's agency.
Always be sure to compare lenders, loan programs, and title companies for the best rates. Ask your Realtor for recommendations on the best options and prices.
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