The purchase and sale of a property entails a series of expenses, such as payment to the notary and the Property Registry. However, there are other hidden costs of buying a home that you should take into account before signing the sales contract or mortgage.
What Are The Hidden Costs Of Buying A House?
The purchase of a property is not limited to the payment of the amount demanded by the seller but also includes a series of expenses such as the registration of the public deed and the payment of taxes, among others. But there are also a series of hidden costs of buying a home that you should take into account before signing a purchase contract or a mortgage.
Both the commercial transaction and the financing for the purchase of a home include some hidden costs that it is better to know from the beginning. What are these hidden costs of buying a home? If you need any kind of help to sell or buy a house for cash you can contact Minnesota Home Guys.
Property Appraisal
The appraisal or valuation of the property is one of the requirements that banks request when granting a mortgage; it is also something that could be paid if the purchase and sale is made through an agency. Payment for the appraisal is a price that many buyers do not take into account when starting the purchase process and its cost can vary: from 150 to 300 euros.
If you have some trust and relationship with the seller, approach him. Before putting the property up for sale, an appraisal is usually done to know how much to ask for the property. If it is a recent appraisal, it may help you.
Topographic Survey
When purchasing an old property, it will likely be necessary to pay for a topographical survey. This is a detailed report on the structure of the house and is recommended not only for houses of a certain age but also for those located in areas at risk of flooding or subsidence.
Although it represents an extra expense, it is highly recommended to request this report to avoid future problems and hidden defects in the sale.
Transfer of Ownership
When you buy a new house, you pay VAT for the purchase of the home. But when it comes to a second-hand property, you have to pay the Property Transfer Tax or ITP. The ITP must be paid by the buyer and its amount varies depending on the Autonomous Community where the property is located, as well as its characteristics.
Home Insurance
Home insurance is one of the hidden costs of buying a home. It is a necessary expense that many buyers do not take into account. Through insurance, you can not only insure the property but also its contents.
Hidden Costs Of Buying A House Through A Mortgage
There are also hidden costs of buying a house through a mortgage loan. Although the mortgage is a great investment and has many advantages, it also includes some hidden costs that must be taken into account before signing the contract.
These are found in the clauses or small print of the credit and represent an additionalΒ charge on the total amount of the credit. So, you end up paying a little more than what was initially borrowed for the purchase of the property.
These expenses are the interest on the mortgage, but they can also be included in the contracting of some bank products, which are made mandatory.
Insurance and Products
When you buy your home through a mortgage, the bank may force you to contract some of its products and services, such as home insurance, mortgage life insurance, or protection against non-payment. Payment for these services is recurring and can be monthly or annual. They represent an extra expense for your pocket and are not necessary for taking out a mortgage loan.
Within these products, it is possible to find the famous revolving cards, which are credit cards that defer all purchases and cash provisions. This type of card generates an extra cost on the mortgage and is unrelated to its granting.
Commissions, One Of The Hidden Costs Of Buying A House
Mortgage contracts include a series of clauses and conditions that must be met to receive the credit. The clauses may include some commissions that make the monthly payments paid more expensive; That is, the monthly payment may be used to pay commissions and only a small part to cover the debt.
This includes, for example, opening fees, modification of the mortgage interest rate, or modification of the credit. It is essential to read the fine print of the mortgage contract carefully before signing it, as it may include abusive clauses that increase the period in which the loan is paid.
