Do You Need Private Mortgage Insurance?

Do You Need Private Mortgage Insurance?

The Extra Costs To Plan For When Purchasing A Home

by Luke Fields

One of the most important things you can do when buying a house is budget properly for the purchase. While most people are good at sticking with a budget amount for the cost of the house they buy, a lot of people forget to factor in all of the extra costs associated with the purchase of a house. If you are trying to protect your budget, you should figure in the following extra costs most people pay when buying a house.

Closing costs

Closing costs are fees associated with buying a house that you cannot avoid. While some loan types allow you to roll these costs into the loan, it is better to pay them out of your pocket if you can. By paying them upfront, you can keep your loan balance lower, and this will help you have a lower monthly mortgage payment to make.

Inspections and other services

As a person buying a house, you will have to pay for inspections and other types of services too. These costs are often considered closing costs, but some of the fees must be paid upfront when buying a house. Some of the fees you may encounter with this include an appraisal fee and a fee for a home inspection.

Moving expenses

A lot of people also fail to remember to budget in the costs of moving. Moving costs money, even if you handle the tasks yourself. You should plan to pay for these costs out of your pocket, and you can try to add them up ahead of time to determine how much they will cost for your move.

Utility deposits

When you move, you will also be responsible to turn on the utilities in the house you are moving to. When doing this, the utility companies might require that you pay a deposit in order to get the utilities turned on, or you might have to pay installation fees or pay for the services upfront. In any case, there will be fees you should plan for when moving.

Home insurance

The other expense you will have is for home insurance, and you will probably have to pay for an entire year of coverage in advance in order to close on the house loan.

Figuring in money for these expenses will help you avoid becoming house poor. If you have more questions when looking at single-family homes for sale, talk to a real estate agent.


About Me

Do You Need Private Mortgage Insurance?

Welcome to my website. My name is Larry Silva, and I want to talk a bit about private mortgage insurance. You may have heard the term PMI mentioned when you were in the process of purchasing real estate. When I first heard my lender talking about PMI, I was very confused. It was my realtor who sat me down and explained what private mortgage insurance was and when someone is required to purchase it. He told me that PMI is not lifelong insurance; it can be cancelled when the mortgage principal balance reaches a certain point. Once it was explained to me, private mortgage insurance was no longer a mystery or a confusing concept. I would like to pass on what I learned and hope that you find it to be of value.