Before you embark on the process of buying a home in Illinois, you may want to familiarize yourself with the different expenses involved. Most people know they will pay a monthly mortgage and need a down payment, but there are some additional fees and costs you need to prepare to pay as part of the home buying process.
PennyMac explains you may need to put down earnest money, which is a deposit that you put into an escrow account. This deposit shows you are serious about your offer on the home. It is usually about two to three percent of the home price.
When you secure the mortgage, you also need to think about paying taxes and insurance. Depending on your loan and lender, you may have to pay a year’s worth of property insurance upfront. The amount you pay for insurance will vary greatly depending on the property value, what you insure and other details about you and the home. You also may have to pay property taxes. The city you live in sets the property tax rate, which is a percentage of the property value.
Finally, you have closing costs, which are the different expenses that you must pay to finalize the sale and secure the loan. The seller may pay some closing costs if you negotiate that as part of your offer. As part of these costs, you may pay fees for an attorney, the application, to your broker and to the title company. Also included in these costs is paying for an appraisal and inspection. You may also pay for processing the underwriting on your mortgage loan. This information is for education and is not legal advice.