Purchasing a home is an exciting time, especially for first-time homebuyers. However, what most buyers fail to realize is that there’s much more that goes into owning a home than just the mortgage payment.
To give would be homeowners a better sense of budget they need to purchase and maintain a home; we have put together a list of most common expenses that are often overlooked.
Most people think that since they’re paying for rent, they are capable of purchasing a house and paying mortgage on a monthly basis. But if you’re only plugging the interest rate and the principle into your mortgage calculator, you might get into deep financial trouble. Mind you, it can easily sum up to $500 to $1,000 a month, depending on the town or municipality in which you reside.
Since a house would be the biggest purchase you’ll have in your life, we recommend having it professionally inspected beforehand. This is beneficial so you can learn more about the property before closing. Plus, you’ll be alerted about any potential issues that may come up in the near future.
Before you even sign the closing documents, expect to pay thousands of dollars on closing costs. This generally includes title insurance fees, survey fees, recording fees, underwriting fees and processing fees.
Closing costs vary, but to give you a rough estimate, it ranges between 2-3% of the mortgage loan amount.
Before purchasing a home, lenders would require you to have the property appraised. Lenders use this in determining the amount of money you are entitled to borrow.
A professional real estate appraiser’s fee usually ranges from $350 to $400, and you are required to pay for their services whether or not the deal goes through.
You finally own the house, but the expenses do not stop there. Moving to a new location also cost money.
According to a 2010 report by Worldwide ERC, an association that tracks mobility cost, the average professional household move costs a whopping $12,230, which is the cost of a full-service professional move. If you are on a tight budget, you can orchestrate the move yourself by renting a truck.