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In the weeks before you close on a new house, it's tempting to think you've overcome the most challenging financial hurdles of real estate. The truth is that in the run-up to moving day-and heck, even after you've completely relocated-unexpected fees and expenditures can pile up. Here are a few steps you can take to keep costly surprises to a minimum.
1. Protect Your Credit
Moving involves a litany of expenses that can have you reaching again and again for your Visa or MasterCard. Be careful: Eating up your available credit can throw off the assumptions that shaped the terms of your pending mortgage. If you start maxing out your credit cards, your lender might be forced to deem you a greater risk, which could in turn make your mortgage rate go up. So hold off on charging any big-ticket items (for example, new furniture) until after you close.
2. Research Municipal Fees
Believe it or not, some municipalities require a payment from outgoing homeowners, while others slap a fee on those who are just joining the local population. You might even get dinged by both the place you are leaving and the place you are moving to. There's no way around municipal fees like this, but because they can amount to thousands of dollars, take the time to determine whether you'll be facing any.
3. Avoid Building Fines
If you're moving out of a condominium or apartment building, check with the board or management company well in advance of your move. Outgoing occupants are most likely required to follow an established procedure. It's possible, for example, that your building enforces quiet hours or that moving trucks are permitted to park only in designated spots. Failing to observe the rules could mean a hefty fine, so be sure to find out what the regulations are.
4. Beware of Outstanding Payments
Directly question the home seller about any outstanding or impending fees, assessments, special taxes, or improvement costs. If there is money owed, it's not your obligation to pay it-at least not prior to the closing. Settle all questions of debt before taking formal ownership of the property, or else you could be stuck picking up the previous owner's tab.
5. Expect Mortgage Add-Ons
Thanks to the ongoing realignment of lending norms, the Federal Housing Authority (FHA) has boosted the fees it charges buyers at closing. The FHA guarantees about one-third of mortgages each year, so don't assume that your new loan is going to resemble your old one. Identify the differences between the two and know what you're getting into.
Finally, a tip about tips: Don't forget to have plenty of cash on hand for those folks who will make your life a bit easier as you go about the always-tedious task of moving. Everyone appreciates a little appreciation.