5 Upfront Fees Houston First Time Home Buyers Must Budget For
Before you begin your home search, in addition to applying for a mortgage, you should make sure you have all the necessary funds you will need to finance your new home purchase. Here are 5 items you will need to pay out of pocket. This means you will need to have the money on hand and ready to go.
Earnest Money - The required amount can be between 1-5% of the purchase price. However, earnest money can be as much as 10%. The earnest money amount will vary for each property and builder.
Option Fee - Option fee will also vary from property to property. Expect to pay between $100-$500. However, don’t be surprise if it’s a bit more. This fee allows you a certain amount of days to cancel the contract for any reason – or no reason at all. The amount of days is written in the contract. Typically its between 7-14 days, but not always. Speak with your agent before signing the contract. Option fee is not required for brand new homes.
Inspection Fee - Although fees will vary, expect to pay between $250-$750. You should never purchase a home without first getting it inspected by a license inspector. Call at least 3 different inspectors before hiring one. Fees will vary.
Pest Inspection Fee - This is the cost of having the home inspected for termites, infestations and other insects. Although cost will vary, expect to pay between $80-$250
Appraisal Fee - Is the cost of having a professional appraiser estimate the market value of the home you are in the process of buying. This is how the lender ensure that the home is worth the price it is being sold for. Cost is usually between $500-$700. Although it can be a part of the closing cost, some lenders will ask you for a credit card for which to charge the amount. Thank you so much for stopping by. We at First Home Houston is always looking out for your best real estate interest. As always, we thank you for stopping by. Until next time… Diana.
