Whether you're looking at buying your first Utah home or
trading up to a larger one, there are many costs - on top of
the purchase price - that you must figure into your
calculation of affordability. These extra fees, such as
taxes and other additional costs, could surprise you with an
unwanted financial nightmare on closing day if you're not
informed and prepared.
Some of these costs are one-time fixed payments, while
others represent an ongoing monthly or yearly commitment.
While not all of these costs will apply in every situation,
it's better to know about them ahead of time so you can
budget properly.
Here are some of the extra costs:
- Appraisal fees can cost between $350 to $400 and are
required by the lender.
- Property taxes are an inevitable cost of
Buying
a Home in Utah County. You can usually pay them in installments.
Property tax in Utah County is typically between
half of one percent to one percent of the homes
value. Make sure your lender is quoting you a price
that includes the property tax.
- Survey fees are usually optional when buying a
home in Utah County. Less than one percent of
Utah Home Buyers
request a survey on a property.
- Property insurance covers the replacement value
of the structure of your home and its contents. This
is often referred to as fire insurance. This is paid
yearly and typically out of your escrow. You pay
into your escrow every month and the lender pays
your property insurance and property taxes when they
are due.
- Title fees cover the cost of title insurance,
funding fee, doc prep, overnight Fed/Ex fees,
recording, etc. These fees are charged once at
closing and are not reoccurring.
- A home inspection can cost between $300 and $400
(although this figure can be higher for larger, more
expensive homes). About 70% of home buyer are
requesting home inspections when buying a home in
Utah County.
- The cost of getting the loan with the lender.
These fees can vary greatly depending on your
lender.
Please ask
Team Teasdale Realty for reputable lenders in the Utah
County area.
Be Familiar with the term PITI
Be familiar with the term PITI. This stands for
Principal, Interest, Tax and Insurance. In relation to a
mortgage, PITI is the sum of monthly principal,
interest, taxes, and insurance. That is, PITI is the sum
of the monthly loan service (principal and interest)
plus the monthly property tax payment, homeowners
insurance premium, and, when applicable, mortgage
insurance premium and homeowners association fee. For
mortgagers whose property tax payments and homeowners
insurance premiums are escrowed as part of their monthly
housing payment, PITI therefore is the monthly "bottom
line" of what they call their "mortgage payment"
HOA: Home Owners Association Fees
If your home is located in a HOA you will have to pay a
monthly, quarterly or yearly fee. A homeowner
association is a corporation formed by a real estate
developer for the purpose of sharing expenses. For
example, you buy a condo in Provo and pay a $100 monthly
HOA fee. This fee covers, grounds maintenance, snow
removal, cable, water, sewer and garbage for the
entire condominium complex. You are required to pay the
HOA fee every month. If you don't pay your HOA fee, the
homeowner's association can and will put a lien on your
property. We are seeing some HOA fees climb over $150 in
Utah County. Around ten years ago a $100 HOA fee in Utah
County was a major milestone. It won't be long before we
see our first HOA fee hit $200 in Utah County. This is
one of the downsides of belonging to a homeowners
association. The fees can and do change from time to
time and they very rarely go down.
Remember, buying a home or
Condo in Utah County is a major
decision;
and whether it's your first, second or tenth, there are many
small but important details, not to mention stress and
excitement, to deal with during the process.
The last thing you need is unbudgeted financial obligations
in the hours before you take possession of your new home.