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The costs of buying a home

First-time homeowners expect to put down a hefty sum as their down payment. However, many people about to purchase their first home are often unaware of other costs that may not be so obvious. Knowing what you can expect to spend on a closing in New York can help you prepare emotionally and financially so that everything goes smoothly when you need it to.


As a buyer, you may need to pre-pay some of your home ownership costs at closing. You probably realize that you will have to pay property taxes every year. If you are putting down less than 20 percent of the purchase price for your down payment, you must put funds into an escrow account, which your lender will then use to pay expenses such as homeowner's insurance premiums and property taxes for the first few months. Homeowner's association fees may also need to be put in the escrow account.

Assorted fees

Miscellaneous fees due at closing can also add up. These include the appraisal fee and the credit report fee, which were initially paid by your lender. There will also be some fees related to your title insurance. Your purchase and lending documents also must be recorded with local and/or state government entities, which also charge fees for the recording. In addition, your lender will also charge you a fee for processing your loan. Expect to pay several minor fees such as the tax service fee.


In some cases, your mortgage insurance provider may demand a home inspection. However, even if no one is making you schedule a home inspection, it is generally a good idea to have one. Inspections can uncover hidden problems and potential money sinks before you close so that you can make a fully informed decision as to your purchase. Plan to spend a few hundred dollars on a comprehensive inspection.


Your lender can require you to have a survey done to conclusively establish the boundaries of the land. In most cases, this happens if previous documentation is unclear or there have been previous disputes regarding boundaries that were not conclusively settled. In other cases, this may simply be a lender's policy.

When planning out your purchase costs, make sure you plan for typical closing costs. In addition, it is always a good idea to have a cushion of a few thousand dollars in the event that the seller, lender or insurance provider set forth additional requirements. To find out more about handling your home purchase correctly, consult an experienced real estate attorney.

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