Buying a new home, whether it’s your first or you’re finally upgrading, is an exciting endeavor. It can be easy to get caught up in finding your perfect dream property and forget to stick to a budget. Or, hopeful homeowners will budget for the costs of buying a home, but neglect to factor in the ongoing expenses of owning property that remain long after the deal has been closed.
Before you begin your search, make sure you factor these 10 costs of home ownership into your budget!
1) Down Payment
The standard down payment is often considered 20%. However, with most mortgage loans these days, the buyer is only responsible for putting down about 3.5% of the total price.
2) Moving Costs
Depending on how much you already have, hiring a moving company might be your most efficient option when it comes to transporting your belongings. Even if you opt to do it yourself though, you’ll still need to pay to buy and rent the necessary supplies.
3) Closing Costs
The cost of closing for the buyer includes covering various fees (inspection, lender, etc.), taxes, and commission for your agent. This typically runs you about 2-5% of your loan.
Most people don’t forget to factor this one in. Your mortgage will be your monthly payment toward your principle balance, with interest, and sometimes include the cost of mortgage insurance as well.
5) Homeowner’s Insurance & Property Taxes
These will vary based on where you live and may already be included in your mortgage payment to the lender.
6) Homeowner’s Association
Homeowner’s Association membership is required in many communities. It is likely you will have to pay dues that are either monthly or at least annual.
7) Utilities & Maintenance
Every month you will be responsible for utility and maintenance costs, which may be new expenses if you’re going from renting to owning a home. This includes water, sewage, gas, electric, trash, landscaping, and regular repairs and updates.
Other Expenses to Consider
8) Furniture & Appliances
If this is your first home, or you’re upgrading in size, you also need to think about the cost of furnishing your new property. Going from a one-bedroom apartment to a three-bedroom house is going to leave you with a lot of extra space to fill.
9) Larger Projects
Over time, you’re going to come across unexpected issues that can run a pretty high bill. Roof repairs, HVAC system problems, or plumbing issues, for example. Plus, you’re likely going to want to invest in some other renovations, such as new floors or a basement refinish, at some point. While the increase in your property value will be worth it, the upfront costs will not be cheap.
When you team up with a real estate agent from Smith & Co., we’ll do everything in our power to get you the best deal on your dream property. Contact us today to learn more about what makes us the Woodward community’s top resource for real estate services!