Buying a home in Los Angeles is not just a matter of putting down money for the down payment, getting a mortgage and then paying interest on that mortgage. There are other hidden costs which need to be considered:
If you are getting a loan your lender will provide you with an estimate of these costs so you will be prepared.
A rough estimate of the closing costs for a buyer are 1.5% of the purchase price. This includes the loan fees which should be discussed up front with your lender. In fact your lender is now required to provide you with a Good Faith Estimate which will show you your closing costs within a 10% margin of error. Closing costs vary, but as a buyer you are responsible for your portion of the escrow fees.
Among the fees you will be paying will be the appraisal, and some banks may require two appraisals to be performed. The appraisal can cost between $300-$400 depending on the area.
You will be paying for a home inspection, and depending on the results of that there may be additional experts you will bring in. The home inspector charges between $300-$400 on average.
Condo Association Fees
If you are buying a condo you will have monthly association dues which need to be factored in to your budget.
Insurance and Property Taxes
Home owners insurance, averaging around $1000 – $1,200 a year and property taxes, 1.25% of the purchase price will add to your monthly bill.
Utility Bills and Miscellaneous Upkeep
If you are a first time home buyer, you probably have only paid your gas and electric bills. As a home owner you will be paying for water also, unless you are in a condominium building where the monthly dues include water. And, you will be paying for the upkeep of your home.
Possible repairs and/or upgrades
Hopefully these will not be necessary so, do your homework before you jump into buying a Los Angeles home that is going to exceed your comfort level.
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