Unexpected Home Buying Costs
Purchasing your own home is incredibly different from renting and it’s important to realize there’s a slew of out of pocket costs that you’ll want to be prepared for! You may see a house listed at a particular price, but with so many extraneous costs these days it’s difficult to capture what you’re truly in for. According to a new analysis from Zillow and services marketplace Thumbtack, Americans will have to spend nearly $9,400 in “hidden” costs to own and care for a median-priced home. This of course, depends on where you live and what’s truly considered “hidden” but regardless, it’s important to have a grasp of how common it is. This blog will discuss how to look out for and avoid unexpected home costs.
Taxes and Insurance— Many people see the price tag of the house and forget one very important component of the price—property tax. This is not only an annual tax for owning the house, it’s a tax that increases depending on the number of renovations you complete. The best way to anticipate how much extra you’ll be paying in ongoing taxes and insurance is by using a monthly mortgage calculator. United States homeowners usually spend roughly $2,000 annually on taxes, and then an additional average of $1,000 for homeowner’s insurance. Unless you have an escrow account, you’ll pay these fees monthly directly when they’re due.
Inspections—Before you close your home, the last step is to take care of any inspections that may be looming. In fact, your lender may even require you to complete them before finalizing. Normally one would order a general inspection as well as a wood-destroying insect inspection. These inspections usually add up to a few hundred dollars but could be the deciding factor for potential home buyers.
Closing Costs—Your lender will run these numbers for you once your offer is accepted, but usually your closing costs will average between 2-5% of the home purchase price. These costs include lender fees, appraisal, title or attorney fees, escrow fees, and interest. It’d be safe to anticipate paying a few thousand dollars for these types of payments when you close on your home.
Maintenance and Repair—When you’re looking to sell your home, you’ll most likely consider some maintenance and safety improvements that will make it more appealing for potential buyers. Safety features are often covered when you’re renting a space, but unfortunately as homeowner’s it’s a major expense you’ll need to consider. Whether it’s simple things like changing the locks, or big projects like re-landscaping the front yard, safety and maintenance expenses will take up a larger chunk of your budget than you may assume when moving out. The same goes for moving into a new space. Be sure to calculate costs of renovations you wish to complete and what that looks like for your overall budget.
These are just a few of the most common costs to look-out for. We hope this helped you along in the process and makes your experience all the more amazing!