Question Details

Deb, Home Buyer in 01757

What are other costs associated with home buying?

Asked by Deb, 01757 Mon Dec 3, 2007

We have 19,000.00 saved and have no idea what closing costs, and whatever other fees will exist in actually buying a home....basically we both work and time for real estate classes are non existent, and the info I am gathering in websites are a bit confusing....and scary! So of these savings, what will be actually left for a downpayment in a worcester county, ma home???

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Deb, at the risk of being conservative, I would say if you can't afford an attorney, you shouldn't buy a home right now.

The listing agent and your buyer's agent might both be wonderful, but they are biased in a way that your lawyer is not.

Also, I get the car analogy, but the taxes and closing fees are a little more complicated, partly because the same people who want to sell you a car will often finance the car; but in the case of a house or an apartment, your seller and your lender are going to be two different parties.

I know it's complicated, but the consequences of missing a house payment are far greater than the consequences of missing a car payment -- so look before you leap!

Alison Rogers
author, "Diary of a Real Estate Rookie"
Insider Real Estate Tips with a Twist of Humor: http://tinyurl.com/2ag28z
Web Reference: http://tinyurl.com/2ag28z
0 votes Thank Flag Link Mon Dec 3, 2007
well, a lawyer is not an option, I don't think. That's what I mean by confusing: when one goes to buy a car, one takes a downpayment and finances the rest; sometimes dealerships will also have some set fee to be paid upfront. I always assumed that buying a home was the same thing....sigh...right or wrong??????
0 votes Thank Flag Link Mon Dec 3, 2007
Closing costs are generally location-specific, but the categories don't change.

* You have to pay your lawyer. DO NOT attempt to buy a home without one. Realtors can be lovely (I am one) but only your attorney has your best interests at heart.

* You have costs associated with your loan. Your mortgage broker can explain this, and so does Carolyn Warren's fantastic book, "Mortgage Ripoffs and Money Savers" -- it will save you hundreds, if not thousands.

* You have to pay a tax associated with the amount of money you're borrowing. In New York City this is 1% of the amount borrowed. Ask a realtor and/or mortgage person in your area what the mortgage tax is.

* Taxes have to paid when real estate is transferred -- whether the buyer or seller pays them is, again, a function of the local market. Everybody likes to get their fingers in these real estate transfer taxes (in NYC, we just call them RETT) so again, research what the state wants and what the county/city wants, because you'll have to pay both. A search for "Massachusetts Department of State -- taxes" should lead you to a website where this would be explained.

Hope that helps -- oh, and you might enjoy my book too.

Alison Rogers
author, "Diary of a Real Estate Rookie"
Insider Real Estate Tips with a Twist of Humor: http://tinyurl.com/2ag28z
Web Reference: http://tinyurl.com/2ag28z
0 votes Thank Flag Link Mon Dec 3, 2007
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