Denver Metro Area Closing Costs Breakdown

When buying a home in the Denver Metro Area, there may be several costs that are unexpected. These costs are typically unavoidable but vary from a case to case basis. 

  • Inspection Fees
  • Closing Costs
  • Property Tax
  • Mortgage Insurance
  • Homeowners Insurance
  • HOA and Condominium fees
  • Moving Costs
  • Maintainence

Inspection Fees

Not to be confused with a mortgage appraisal, a home inspection is essentially a full walkthrough to determine the quality of the construction, appliances, heating, cooling, electrical systems etc... This helps to identify any existing problems with the home and ensure that nothing is dangerous for prospective buyers. A decent inspection can run an upwards of $300 dollars. 

 

Closing Costs

Closing Costs are fees charged by third parties who have been a part of the purchase of your home, I.E. a Mortgage Lender. This includes the fees for checking your credit report, government recording charges, appraisal, title fees and insurance, as well as loan origination. This is one chance that buyers have to negotiate with the seller for a contribution towards these costs. These tend to run between 2% and 5% of the purchase price of the home. 

In Colorado, these fees are most commonly split between the buyer and seller, and tend to come out to around $250-$350.

 

Property Tax

DAVID DO THIS

Mortgage Insurance

If you take out a Conventional Loan with a value ratio of around 80 percent, chances are that you will pay private mortgage insurance. This type of insurance will pay your mortgage company if you dont make pay. On average, the insurance premium is added to your monthly mortgage payment but will reduce as you pay down your loan, and will disappear altogether as soon as you home has accrued 20% equity. FHA Buyers always pay mortgage insurance for the lifetime of their loans. 

 

Homeowners Insurance

Homeowners Insurance pays if you home is damage or destroyed by and of the sources listed in their respective policies. Policies that cover greater risks tend to have higher premiums; while homes in flood, earthquake, or tornado zones may need additional insurance. The mortgage company will typically have you pay your property tax and insurance premiums to an escrow account. The lender will then, from an Escrow Company, take the money from that escrow account and pay your bills with it. This helps the lender to have full control of your bills being paid on time. 

The majority of lenders will ask for sizeable escrow deposits upfront, which often catches first time buyers off guard. Coming up with a full years worth of homeowners insurance premiums as well as several months property tax up front can cost several thousand dollars, depending on where you home is located. 

 

HOA and Condominium Fees

HOA Stands for Homeowners Association, which provide people in their communities with certain benefits at a cost. Many HOA's are not optional and will cause serious issues of not paid. However, an HOA can cover things like trash removal, grounds maintenance, roof insurance, exterior repairs, etc... Depending on where you buy, the HOA can be very affordable, or very relentlessly expensive. There are also costs associated with transferring the HOA to a new owner, which run about $250 for transfer and $250 for HOA Status Letter. There are additional costs for Sub HOA's.

Check out some homes for sale in the Denver Metro Area with NO HOA

Moving Costs

This one is rather self explanatory, but can easily be overlooked in the excitement of finding your new home. Unless you have family and friends to help you with a local move, there is a chance you will need to hire movers, or rent a moving truck at the least. These costs are amplified by distance and volume of things you need to move. Most companies will quote a price for your move online or over the phone. 

Maintenance

Also rather self explanatory, once the home is officially yours, you're on your own in terms of paying for and handling repairs. Not everyone has DIY handyman skills and getting repairs for certain items in the home can be costly. We advise keeping an emergency fund for unforeseen events of this nature. 

Some Good News

Buying a home should be one of the most exciting things in your life, and real estate professionals as well as lenders know that its extremely important for you. We do everything in our power to ensure that we find the correct place for you, the lenders are obligated to ensure that you can afford everything and will provide you with good estimates about your mortgage and other fees to allow you to budget for them. So while there are many things to consider when purchasing a home, keep in mind that The Hakimi Team is on your side to make sure everything is accounted for. 

 

 

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