Underestimating the Costs

It is easy to underestimate the costs of buying a home, especially if you take too much stock in online mortgage calculators and tools. Here are some hidden costs that you need to prepare for, as well as tips for those buying a home for the first time.

Remember that mortgage calculators fail to consider critical factors, including:

  • Your credit history and score
  • The amount of money that you currently owe, your debt
  • The cost of property taxes on the home you are purchasing
  • Closing costs, which typically run up to 4% of the purchase price of the property

These various factors increase your monthly mortgage payment, and can impact the terms of your loan, including interest rates. Some of the costs that will impact what you pay for your new home are:


Any lender that you are borrowing from for a home will require property Insurance. This is typically added on to the cost that you pay monthly for your mortgage.

Property Taxes

Is the property behind on its taxes? If so, lenders often require that the overdue taxes are paid within 60 days of closing. Also, the taxes on the property are also added into the monthly mortgage cost, further causing this amount to fluctuate.  

Home Inspections

Lenders require home inspections to ensure they are not loaning money for a property that is not in good condition or that has issues. These home inspection costs are typically the responsibility of the prospective buyer or borrower.

Closing Costs

Closing costs usually run around 2-4% of the total price of the home, but what are they? The closing costs of your home may be the burden of the buyer or they may be negotiated to be the responsibility of the seller- it depends.

Some examples of fees included in closing costs are:

  • Loan application fee
  • Appraisal
  • Attorney fees
  • Escrow fee
  • FHA fees for first time homebuyers
  • Cost of credit report
  • Survey fees
  • Underwriting fees, whether you end up buying the home or not

This is not an inclusive list, nor are all buyers going to face the same fees when closing on their new home. Many things influence what these costs are, from the seller to the lender, which can change the price that buyers pay, significantly.

HOA or Homeowner Association Fees

If you are purchasing a property that belongs to a Homeowner Association, you likely will need to transfer and pay HOA fees. The seller of the home is usually responsible for transfer, which will indicate the amount, if fees are owed, and when they are due- in addition to any other pertinent information for the buyer. Review these documents carefully, as they also will include any rules, regulations, and by-laws that you must abide while living in the property. 

It makes the most sense to speak to a local reputable lender to obtain a more-accurate, good-faith estimate for the property that you are buying. Many realtors have their own preferred lenders- including us- and are happy to refer you, as needed!

Looking to buy a home? Team Hensley in Richmond VA is happy to help. We represent some of Richmond’s finest properties. We provide our clients with privacy, speed, efficiency, and security - all key when investing in a home or other property. We have a rich history and unsurpassed experience working in the Richmond metro region and we aim to make the home-buying experience as smooth and satisfying as possible. We are here to answer all your questions; call us today or fill out the contact form below:

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