Whether you are a first-time buyer, a new resident to Texas or a seasoned homeowner that is looking for a new home, you need to know what you can afford and a big part of that equation is the closing costs that you need to consider when making a home purchase. It’s not a simple as basing your calculations on the offer price that you have in mind or even the final sale price for that matter. There are numerous monetary requirements and costs to consider during the offer and completion process.
So, here is a list of 5 costs to consider when buying a home in Texas.
1. Down Payment
The largest upfront cost you will incur in any real estate transaction will usually be the down payment on the purchase of a home. Depending on financing options and purchase conditions, a down payment can range from 3.5% to 20% or higher, depending on if you get an FHA or conventional mortgage loan. If you are a Veteran, or a surviving spouse of a Veteran, you may qualify for a no down payment VA loan.
2. Property Taxes
Ranked as the sixth highest in the country, Texas’ effective property tax rate costs the typical homeowner about $1,500 a year. Property taxes is one of the taxes which people tend to miss when calculating a rough estimation of the buying costs. Property taxes are not a fixed tax, they vary depending on the value of the home, so the rate goes up for more expensive properties.
3. Homeowner Insurance
Ranked as the seventh most expensive state in the country for home insurance, Texas’s homeowners’ annual premiums for homeowner’s insurance is around $1,945. How much you will have to pay for home insurance depends on your home’s size, location and a multitude of other factors, so it’s best to confirm rates if you are on a tight budget.
4. Closing Costs
Loan origination fees, escrow deposit, appraisal fees, title insurance, survey fees, credit report fees are all costs that you may have to pay as soon as you have closed the deal which means as soon as the seller has accepted your offer and has signed the deal and handed you the original property papers, you have to pay this cost. Fortunately, Texas does not impose any recording fees on the transfer of the real estate which some States typically charge somewhere around $.55 for each $500 of value.
5. Movers Closing Costs
Finally, we come to the often-overlooked moving cost which a lot of people forget to factor into their home buying budget. Although you can go through the trouble of packing and unpacking all your stuff yourself, the thought of a whole home move can be daunting when you actually sit down and consider how many truckloads of stuff you will have to move, and the time involved. No doubt you will looking to hire good junk haulers to get rid of all those unwanted items during your move. However, it goes without saying that most people would also rather have the peace of mind of simply delegating all moving chores to a company that’s an expert at moving in the area and does it on a daily basis.
Some real estate agents also have relations with movers and trash pickup services. So, do ask about them for a recommendation too.