Nearly every homebuyer starts with a budget. Beginning the process with a down payment and sales price in mind could simplify your search and avoid the disappointment that comes with falling in love with a home you can’t afford.
However, it’s not unusual for home shoppers, and particularly first-time buyers, to overlook certain costs. Avoid the sticker shock that comes with letting these six expenses sneak up on you.
1. Home Inspection – One of the most critical steps when buying a home is to have a thorough inspection of the property done before closing. At a minimum, expect to spend several hundred dollars on a general inspection that evaluates the home’s safety and structural fitness. A more in-depth look, such as termite, sewer line or pool inspections, may also be necessary. They will add to your costs, but provide an opportunity to have the seller remedy any deal-breaking problems.
2. Closing Costs – Once you’ve settled on a home and agreed on a price, completing the transaction brings additional costs. Origination charges, along with the cost of an appraisal will most likely become part of the final price. You may also decide to buy down the interest rate of your loan using origination points.
3. Taxes – As a homeowner, you’ll be responsible for the property taxes due on the property. In fact, you’ll likely be charged a prorated portion of the current year’s taxes at closing. Also, your lender may require you to make a monthly escrow payment going forward, to ensure the tax payment is available when it comes due.
4. HOA Fees –Be sure to find out if your new neighborhood charges a homeowner’s association fee. While many are just a nominal yearly charge, others can be quite substantial, or even a one-time percentage of the property’s purchase price.
5. Moving Expenses – Finally getting the keys to your new home is an accomplishment of its own. But, the next step can be nearly as much work. The cost of moving your belongings can add up fast, especially when it’s a long distance move or if it requires extended storage.
6. Maintenance – Responsible home ownership requires regular maintenance. Keeping your curb appeal requires long-term investment, especially if you hire someone else to do it for you. Remember that even the best home inspectors can’t predict the future, so prepare for the inevitability of unexpected repair bills.
Working with an experienced mortgage partner could limit unwelcome surprises. Contact me to speak with an Open Mortgage specialist today.