Costs and Fees to Keep in Mind

For Buyers

Buying a home is a major financial decision. And, making a down payment is a big part of it—but it’s not the only part. Being aware of other costs and fees that you may encounter when finding a new home can help you choose the right home for you, and feel more prepared when you decide to buy.

Here are a few of the costs you may be responsible for as a homebuyer. You may not have to pay for all of these, but knowing about them will help you avoid surprises.

Lenders fees

If you apply for a mortgage through a lender or a bank, the lenders sometimes charge an origination fee for processing your mortgage application. The fee amount varies per bank.

If your down payment is less than 20% of the cost of your home, your lender may also ask you to buy insurance. This is called Private Mortgage Insurance (PMI).

Appraisal fee

If your mortgage provider requires that your home be appraised (given a price value) before granting your mortgage, you’ll have to pay for this, too— at closing. Costs for appraisals typically range upwards of $300.

Survey fee

This is a fee your lender may charge you for hiring somebody to survey the property lines around your home and determine where they begin and end. The cost of this service is about $500 ane above.

Inspection Fee

After the offer is accepted, if possible, you’ll want to have your house inspected. The inspection will usually cost upwards of $500, depending on the size of your home.

Homeowner’s Insurance

Your homeowner’s insurance policy will protect damage to your home and personal property. In Massachusetts, lenders will require you to have some home insurance in order to protect “their investment” (and it’s good practice, too).

Title Search and Insurance

Before you receive the title to your new home, a search is conducted by your attorney into the land registry and previous owners of your home to find any errors with the title. If there are any problems with the title, they help bring them to resolution prior to the closing.

Your title insurance policy protects you from paying for errors found during the title search. You pay for it only once and it’s valid for as long as you or your heirs own the home. Your attorney is usually able to let you know the cost.

Recording fee

When you close on your home, your deed and mortgage will need to be recorded in the appropriate registries. The recording fee is determined by the state of Massachusetts.

Attorney fees

This is the fee your attorney will charge you for representing you and preparing the documents required for closing.

Third-party fees

There may be a few more items you’ll be responsible for paying for at closing, such as any oil the seller leaves behind in the oil tank, future property taxes the seller may have paid, etc. All of these additional costs will be outlined by your attorney in the Closing Document (CD) sheet….so make sure to have a look at it before you sign on the dotted line.