What are the expenses associated with buying a house?

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Diana Banks - Baserva

Date Published: 2019-11-12

There are several expenses associated with buying a house. When making the decision to buy a house it is important that you know and take into account at least the basic expenses:

There are three types of basic expenses when buying a house:

  1. Cost of the house: It is the price that you agree to pay to the seller. Initially you will have to pay a part of the cost of the home in the initial payment or "down payment" in the case that you buy it with a mortgage loan or financing.
  2. Cost of the mortgage: It is the price you pay for borrowing money to buy the house. The initial mortgage costs include the money you have to pay to your lender, in addition to a mortgage initiation commission, service fees such as appraisal fees and title insurance and, sometimes, mortgage insurance charges in advance.
  3. Real estate or property costs: includes property transfer costs, as well as existing taxes, in addition to other government charges.

You must pay part of these charges in advance when you close the purchase agreement and another part in the long term. The amount you borrow is known as the principal amount. Part of the mortgage payments made each month will be used to pay that principal amount. With the remaining part of your monthly payment the loan interest will be paid.

On the other hand, you will have to pay ongoing costs such as: property taxes, homeowners insurance and owner association fees. These costs may vary over time.

For many people, taxes and insurance costs are grouped into the monthly payment, which means that your monthly payment can increase even if you have a fixed-rate loan.

Because there are several costs associated with buying a house, it is important that you talk to a real estate agent and your lender and ask them how much and when you have to pay.

This article is made for informative and divulgative purposes. For this reason, it is important that before making any decision, visit or contact a certified specialist in the field, since the opinion of the expert is the one that should be considered.
 

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