If you’re buying a home for the first time, you may not be prepared for all of the costs that can go into buying and owning a home. Unfortunately, not even your monthly expenses will be simple because of all of the added costs.
These are some of the costs often viewed as hidden by buyers who aren’t warned ahead of time. However, they can add up to a lot of money, so it’s a good idea to be prepared before you buy.
Property Taxes
Property taxes are an expense that makes sense, yet many forget to follow through on. If you’re ready to buy a home, be aware that the average homeowner in America spends one to three thousand dollars a year in property taxes.
This can be broken down into monthly payments to make it more manageable, and many lenders will allow you to fold it into your mortgage: but it’s still adding hundreds to your monthly expenses.
Monthly HOA Fees
Homeowners’ Associations are becoming increasingly prevalent. In order to increase property costs, these associations work to ensure the neighborhood is homogenous and well maintained. Unfortunately, it can cost anywhere from twenty-five dollars to several hundred dollars a month, depending on the area.
This isn’t something most renters have to face, so when they’re putting information into a house payment calculator, they may be surprised to realize that’s something they’ll have to pay for.
Closing Costs
The closing costs on any property can sit between three to ten percent of the home’s total value. This can be a lot of money to have to deal with, and although there are programs for first-time homeowners to make it more affordable, there’s no guarantee you’ll qualify for them.
Closing costs are often used as a bargaining tool in the housing market, so if you think a property is overpriced, and it’s been on the market for a little while, you may be able to convince a seller to take on the closing costs so that you don’t have to.
Paying For The Escrow
The escrow ensures that a third party holds the money while you’re going through the process of transferring the home into your name and completing any necessary contracts. Unfortunately, it’s not free. The average escrow is between $300 to $750, depending on which lender you go through.
Moving Costs
The surprise costs aren’t all directly from your property! For example, many forget that moving is often an expensive and large task to take on. Whether you have to break your lease to get out of it early or hire a moving company to ensure your belongings get to your new property safely, these can add up and make the home buying experience incredibly expensive.
Home Maintenance and Repairs
The expenses don’t end when you buy your home! Many long-term renters don’t realize the amount of money that goes into maintaining and repairing homes. From replacing roofs to updating wall colors, the average homeowner spends several thousand a year to ensure their property is well-kept.
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