Budgeting for buying a home can be difficult enough when you’re just weighing mortgage options and a purchase price. But there are many other factors that go into the cost of home ownership. Some of them are one-time expenses that you’ll pay during the home buying process, while others will be recurring costs for as long as you own the home. Although this is not an all encompassing list, it should help you prepare before house hunting.
There are several smaller fees that add up to a rather large sum when you’re going through the closing process-loan fees, underwriting fees, home warranty costs and more. They typically add up to 2-5% of the purchase price. For a $300,000 home-roughly the national median-that’s in the neighborhood of $10,000, so be sure to budget for it.
Your lender will require an appraisal, and the appraisal fee (roughly four hundred dollars) comes out of your pocket.
The few hundred dollars you’ll pay for a home inspection is money well spent, but it’s something you have to keep in mind during the purchase process. You’ll have the peace of mind of knowing the house is free from any major issues, and you’re making a smart, solid investment.
Although homeowners insurance isn’t legally required, it’ll almost certainly be required by your lender. Further insurance, such as flood insurance, may also be required (depending on your location).
Home Owners Association
If you’re living in a property or community with shared spaces, you’ll almost certainly have an HOA fee. This pays for things like trash removal, maintenance of common areas, and for recreational facilities like gyms and swimming pools.
There could be other fees, depending on the type of property; condo communities have their own fees as well as many communities with HOA fees. Always call a professional Realtor to begin your home buying process to ensure that you know what to expect in your community. Happy House Hunting!