If you are thinking about buying a home, there are extra costs on top of the home’s purchase price. Between mortgage rates, housing insurance, closing costs, and additional expenses, it’s essential to be prepared for unexpected payments. Today, we discuss the top 6 hidden costs every Rhode Island homebuyer should know about.
1. Escrow Deposit
Your escrow account or good faith deposit is the down payment you
provide to show you are serious about purchasing a home. It goes to the total cost of your investment acting as a security deposit. Before putting money down on a home, make sure you are positive it’s the home you really want. Homebuyers can lose their deposit for a number of reasons including backing out of the home closing deal.
2. Homeowners Insurance
The average cost of homeowners insurance in Rhode Island lies around $1200 per year depending on your coverage policy. Lenders require homeowners insurance to protect their own investments if an accident were to occur. If something were to happen to the home, you are still required to pay the mortgage loan. Homeowners insurance protects both parties. A free special report titled, 13 Extra Costs Before Buying a Home will help you avoid any surprises when buying a home.
3. Interest Rates
Interest rates are inevitable and your rate will depend on different things. For a better interest rate, coming in with a good credit score will help. The higher your credit the lower your rate will be. At the end of a closing process in Rhode Island, your first monthly payments will be higher since it’s mainly interest.
4. Home Repairs
Not all homes will come in perfect condition. Once you purchase a home in Rhode Island, you may have unexpected repairs or renovations to perform. Homebuyers should avoid buying a home requiring too many repairs, you may end up overspending. Look into your budget to determine how much you want to contribute towards remodeling your home. The best way to combat surprise expenses is to create an emergency fund for any unexpected future repairs or moving costs.
5. Property Taxes
Expect to pay property taxes based on where you live and the value of your home. Rhode Island is known for some of the highest property taxes in the nation at 1.53%. Transfer taxes are an additional expense to update the home’s title and transfer it to you.
6. Closing Costs
Closing costs include the fees paid out to different parties like the lender, title, mortgage interest, broker, appraisals ($150-$300), home inspections, and more. Homebuyers should expect to pay at least 3-5% of the total loan for their closing costs. Speak to an expert realtor to get an idea about your closing costs to avoid sudden surprises.
Avoid the Fear of Extra Costs With a Buyers Cancellation Guarantee Agreement
When you decide to work with our team at Your Home Sold Guaranteed Realty- The Nathan Clark Team, we have a buyer’s cancellation guarantee in place to protect you from extra homebuyer costs.
If you’re a Rhode Island resident we give you the right to cancel your Home Buyer Agreement any time before making an offer to purchase your house with no penalties or obligations.
Give us a call today at 401-288-3557 or fill out the form below to see how we can help you avoid extra costly mistakes and protect you with this risk-free insurance policy.