If you’re looking to buy a home in Buffalo, it’s important to be aware of the various costs associated with the process. In addition to the price of the home itself, there are several other costs that you may need to consider, including private mortgage insurance (PMI), closing costs, and property taxes. In this blog post, we’ll take a detailed look at each of these costs, and how they can impact your home-buying journey.
Buying a home in Buffalo, NY, is an exciting step—whether you’re purchasing your first home or upgrading to your dream house. But before you sign on the dotted line, it’s important to understand the true cost of homeownership. Beyond your down payment and monthly mortgage, there are additional expenses that can impact your budget: Private Mortgage Insurance (PMI), closing costs, and property taxes.
Let’s break down each one so you can go into your home purchase fully prepared.
At Buffalo Brick & Mortar LLC, our experienced agents have helped countless clients navigate the complex world of home buying. We understand that buying a home is one of the biggest financial decisions you’ll ever make, and we’re here to guide you every step of the way. So, let’s dive into the costs you need to know about when buying a home in Buffalo.
Private Mortgage Insurance (PMI)
If you’re buying a home with a down payment of less than 20%, you may be required to pay private mortgage insurance (PMI). PMI is a type of insurance that protects the lender in case you default on your loan. Typically, PMI costs between 0.3% and 1.5% of the original loan amount per year and is included in your monthly mortgage payment.
It’s important to note that PMI is not a permanent cost. Once you’ve built up enough equity in your home, you can request to have PMI removed from your mortgage. This usually happens when you have paid off at least 20% of the original loan amount. For many borrowers, this can happen more quickly than they may think.
Closing Costs
Closing costs are the fees and expenses you’ll need to pay when you close on your new home. These costs can vary depending on a number of factors, including the price of the home, the location of the property, and the type of mortgage you’re getting. Typical closing costs can range from 2% to 5% of the purchase price of the home. These costs can often be negotiated between the buyer and seller in order to successfully close the deal.
Some common closing costs include:
– Appraisal fee: This fee covers the cost of having a professional appraiser determine the value of the property.
– Title insurance: This insurance protects you and your lender from any disputes over ownership of the property. It is a necarry cost, that could save you from major financial problems down the road.
– Attorney fees: If you’re working with an attorney during the home-buying process, you’ll need to pay their fees at closing.
– Recording fees: These fees cover the cost of recording the sale with the local government.
– Home inspection fee: This fee covers the cost of having a professional inspector check the home for any potential issues.
It’s important to work with a trusted real estate agent to help you understand the closing costs associated with your specific home purchase. At Buffalo Brick & Mortar LLC, our agents are well-versed in the local market and can help you navigate the closing costs to ensure there are no surprises on closing day.
Property Taxes
Property taxes are another important cost to consider when buying a home in Buffalo. Property taxes are assessed by the local government and are based on the value of your property. These taxes are typically due twice a year, and can be a significant expense for homeowners.
Property Taxes in Buffalo, NY
Property taxes in Western New York vary depending on the city, town, or village you live in—but they’re a significant ongoing cost every homeowner needs to budget for.
How Property Taxes Work
Your property tax bill is based on your home’s assessed value and the local tax rate set by your city, county, and school district. In Erie County, property taxes typically range from 2.5% to 3.5% of the home’s value per year.
Example:
If your home is valued at $250,000 and your total tax rate is 3%, your annual property taxes would be about $7,500—or $625/month added to your mortgage payment if you escrow taxes.
Don’t Forget:
Buffalo homeowners may qualify for exemptions that reduce property taxes, such as:
- STAR (School Tax Relief) program
- Senior Citizen Exemption
- Veterans Exemption
Be sure to apply for these if eligible—they can save you hundreds (or even thousands) each year.
It’s important to note that property tax rates can vary widely depending on the location of the property. Some areas may have higher tax rates than others, so it’s important to do your research before making an offer on a home.
At Buffalo Brick & Mortar LLC, we have a deep understanding of the local market and can help you find a home that fits your budget, including property taxes. Our agents can also help you understand how property taxes are assessed in Buffalo, and what you can expect to pay based on the value of the home you’re interested in.
Working With the Right Team
Buying a home in Buffalo is a complex process, and there are many costs to consider beyond the price of the home itself. Private mortgage insurance (PMI), closing costs, and property taxes are just a few of the expenses you’ll need to plan for when buying a home in Buffalo. Our team can help you learn about the rest, along with a plan to help you budget for these expenses.
When buying a home in Buffalo, NY, it’s not just about the purchase price. Understanding costs like Private Mortgage Insurance, closing costs, and property taxes ensures you’re financially ready and not caught off guard after closing day.
By planning ahead, working with a knowledgeable real estate professional, and comparing lender options, you can make smarter financial decisions and enjoy your new home with confidence.
At Buffalo Brick & Mortar LLC, our experienced agents are here to help you navigate the home-buying process from start to finish. We can help you understand the costs associated with your specific home purchase and ensure that there are no surprises along the way. Contact us today to learn more about how we can help you find your dream home in Buffalo. We are happy to answer any questions you have about the home buying or selling process. 716-403-2016