Purchasing a home for the first time in California is one of the best moments for anyone to have. However, after the excitement has worn off a bit, a person faces the reality of the amount it’s going to cost just to get the home finalized. The many hidden costs included are a surprise to many first-time buyers. If you’re about to be a first-time buyer, then the best course of action for you to take is to understand these hidden costs before the process begins.
Appraisal fee
One of the first hidden costs a home buyer will face is having to get an appraisal on the home they want to purchase. This provides the bank offering your loan proof that the property is worth what the owner says it is. This will usually cost around $600 to complete.
Escrow fees
According to real estate law, homeowners must pay their homeowners insurance and any premiums that may pop up on time. Failure to do so can put you at risk of not having the protection when you need it. However, most homeowners don’t really want to think of this on a daily basis. Thus, lenders will recommend that you create an escrow account. The lender will handle the account to pay your insurance on time. You should also note that this will increase the amount you will give to the lender each month.
Closing costs
Although most people know that there will be closing costs, many are still shocked at just how much they are. Closing costs are huge but unavoidable expenses. The fees paid will go toward the loan origination fee, attorney fees, and any HOA fees involved when you first purchase the home.
The homebuying process is one that may, at times, be complicated and lengthy. Thus, it is imperative that you have an attorney present in the event that issues arise between yourself and the seller.
