BIRMINGHAM, Ala. -- Low interest rates and zero-down home loans are opening doors to first-time homebuyers, but don't let the bargains fool you: Buying a home still costs money.
When Mark Pynes started his house hunt with real estate agent Jeffrey Klinner, he had been preapproved for a home loan with no money down. But he quickly learned buying a house brings a laundry list of expenses.
"There are appraisal costs. There are surveys that have to be done," said Cerita Tucker-Smith, of Barnes and Associates Realty.
"A home inspection or a sewer line inspection fee," Klinner said.
"You'll pay some money to the county and state for recording the mortgage deed," said Chris Hughes, of Southern Eagle Mortgage.
Plus, there are simple costs of home ownership after years of renting an apartment.
"The ones I didn't expect were the actual house-related costs of a lawnmower and all sorts of yard equipment," Pynes said.
Pynes is like most first-time homebuyers, according to industry experts. Hughes said low interest rates and competing loan offers make real estate seem enticing and affordable.
"You can typically finance in excess of 100 percent of a purchase up to 107 percent," Hughes said.
While the discounts are good, many first-time homebuyers assume zero-down deals mean no money needed.
"That's not necessarily true because there are costs associated with the loan," Tucker-Smith said. "There are appraisal costs. There are surveys that have to be done. There are home inspections, and home inspections are very important. There are pest inspections. There are underwriting fees. There are a lot of other fees associated with that loan."
The inside tip on covering those costs is simple -- real estate agents recommend having about $1,000 ready to spend in the buying process. The cost is different for each home and so are the closing costs paid to lawyers and the local government.
"Closing costs are something that are negotiable also," Hughes said. "That's another thing that first-time homebuyers might not be aware of."
The expenses can be split with the seller or used to bring the asking price down. That's what Klinner tells all his clients when they're ready to make a house offer.
"Everything is negotiable," Klinner said. "There is nothing carved in stone. Nothing is absolute and set in a transaction. It is what the buyer and seller come to a mutual meeting of the minds and agree upon."
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