Getting married and starting a life together is usually a cause for celebration. You save and save to investing your money and buy your first home together with visions of raising a family and living happily ever after. But soon you come to realize that saving that amount of money takes time and a lot of sacrifices. When you finally find your dream home and lay down that deposit, the real shock comes - all those extra costs you didn’t expect:
Tax
In most places, you have to pay a lot of tax on your property purchase. This often has to be paid up front, meaning the cash needs to be there before you can take the keys. As with most tax bills, this can run up to thousands of dollars, depending on where you buy your home.
Sometimes there are tax breaks, and some lower priced properties won’t incur a bill. Make sure you know what you’ve got to pay before you sign on the dotted line. You can’t usually borrow that money on top of your mortgage. You might also find there is a tax to pay for the services you used to buy the property. Legal fees and mortgage arrangement fees typically charge you extras here.
Insurance
Few mortgage lenders will hand over your loan if you don’t have life insurance. This insurance is usually for a fixed term, or the life of the mortgage. It is designed to pay out the remaining balance of your loan should something happen to you.
There are other types of life insurance that you might be keen to explore. Lifeinsurancequote.co is one website that can explain the differences in detail. In basic terms, you need to decide what else you want to be covered in the event of your passing. Beyond paying off the rest of the mortgage, you might want some extra cover to make sure all your bills are paid rather than inherited by your next of kin.
You can extend your coverage even further to provide a lump sum or even an ongoing income when you’re gone. This is effectively an inheritance for your loved ones. It ensures their financial needs are taken care of. The term cover is all you are likely to need to secure a mortgage.
Arrangement Fees
Yep, not only are they charging you interest on your mortgage loan, but they will bill you for arranging it in the first place. In many places, this fee can be added to your overall loan. Be wary of doing this though. Just think about it - a five hundred dollar fee can become a five thousand dollar fee over the term of your mortgage because of the added interest.
Your real estate lawyer will also charge fees for their services in addition to the bill for the searches and paperwork. You can ask for an itemised bill to see exactly where these costs have gone. Some property agents or realtors will also charge both the seller and the buyer for their time. Check what fees might come up before you start searching for your dream home.
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