Many will be looking to take advantage of the lower real estate prices, attractive mortgage rates, and federal tax credit by buying a home. For first-time buyers may be surprised by the amount of cash they’ll need to set aside for housing-related expenses that they hadn’t considered. Maybe they thought ‘all they need is the down payment and cost of the house plus interest. Wrong, here is a list of fees that you probably didn’t realize were associated with buying a new home.
A lot of people think they can see what is wrong with a home themselves, but they are mistaken. Don’t take chances with such a huge purchase. You’ll want to take the time to hire a professional to look over the home you are interested in. A home inspector will look for and check things that you wouldn’t even have thought about or couldn’t figure out on your own.
Just as with the home inspector, don’t rely on your eyes alone to see if there is a pest problem or a potential one. Allow the experts to do their job so you won’t regret it later and remember that just because you don’t see anything, doesn’t mean it’s not there.
If someone is lending you the money to purchase a home, they will want to have it appraised. Basically, this is when a person comes in, inspects the property, then reports what it is worth. Lenders use this information to decide how much money they actually need to lend a person instead of just giving a base amount that may be more than what is actually needed.
Closing costs are basically all the small details that you didn’t think about… processing fees, underwriting fees, recording fees, survey fees, insurance fees, and more. These can add up to thousands of dollars by themselves.
Now, you may have already moved once or twice in your life, but let me remind you of how expensive and time consuming the moving process can actually be. Not only will you have to worry about getting all of your belongings transported to your new home, but the costs of living in a new place as well such as refilling the fridge and disconnecting or transferring utilities.
Furniture and Appliances:
Whether you are keeping your own furniture and appliances, or buying new, you will most likely be spending some more cash here. Your old stuff may not fit in your new place or you simply feel it is time to throw away that old couch for a new one.
Taxes and Interest:
When you are told what your mortgage payment is, always anticipate it to come out more than that. What some people haven’t shared is that the amount of interest your lender is charging as well as property taxes have not yet been added to your fees.
Unlike car insurance, home insurance is not mandatory, but on such a big purchase is suggested. Depending on your area, you may need to purchase supplemental insurance to go with your general insurance as different places are prone to different types of disaster and things like flood insurance are not included in generalized home insurance policies.
Depending on where the new home you are purchasing is located, you may have to pay additional ‘condo fees.’ This is basically to cover things offered to residents in certain areas such as lawn upkeep and front desk security.
There are fees to be paid when opening up a new utility service or even transferring your current one to a new location. These can add up to a lot especially considering that you will still have to pay your regular utility bills.
Another thing not to forget is the costs and time behind keeping up your new property. Whether it be hiring someone to mow the lawn and drain the pool or doing it yourself, this is something to consider when purchasing a new home. The place looks nice now, but in a few months, if you don’t do the work, it could easily look like a dump.
If you previously rented, you must remember that there is no longer a landlord to fix things for you when they stop working correctly. This responsibility falls on you and even if your new home is in perfect shape, somewhere down the line, it will need something fixed or replaced and you will be the one that has to pay for it. Literally.