Additional Costs Involved In A Home Purchase
December 21, 2017
Most home buyers are unaware of the fact that there are some additional expenses that follow a home purchase apart from the property price. Whether it be a house, flat or a villa, these closing costs have to be paid off to the lenders and third parties like brokers and local government bodies during the time of property transfer from the seller to the buyer.
Following are the additional costs involved in a property purchase.
Brokerage refers to the fee of the real estate
agent or property consultant who found the suitable property and negotiated the deal between the seller and buyer. The commission for this third party is usually a predetermined percentage of the property price.
Property taxes are to be paid by the buyer and the tax amount is payable based on the type of the property and the configuration. After the time of purchase, the buyer is also liable to pay property tax annually as per government norms.
It is the duty paid for registering property documents and validating ownership during the sale or transfer of the property. The stamp duty varies from state to state and is also based on the property configuration.
Loan application fee
This amount is to be paid by the buyer to the bank for processing the loan application if the finance for the property purchase is arranged through a bank loan.
For appraising the valuation and legal verification of the property, the bank collects these one-time non-refundable charges.
Banks impose a fee on loan applicants during prepayment of the loan amount. These charges are mostly not levied nowadays on home loans and home improvement loans that include a floating rate of interest.
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