Homeownership is something many people strive for at some point in their lives. While it is a rewarding feeling to own a home, keeping it will require more effort than what it took to get it. Though most know how much it costs to buy a home, too few are aware of how much it costs to own a home. Outside of the mortgage payments and utilities, there are expenditures to owning a home that you should be fully aware of so you can be prepared.
Before the Purchase
These are hidden costs of buying a home you may not have been aware of:
1. Home Inspection
Prior to purchasing a home, buyers are advised to have it professionally inspected prior to making a purchase decision. Home inspections point out things about the property that need to be repaired. This service can cost anywhere from $200 to $400. It is necessary, however, so that buyers are aware of what they are purchasing. They can often use the findings to drive down costs too.
2. Pest Control
Pest control is another service that buyers often acquire before moving into a home. Through services like pest inspection, buyers can find out what types of bugs and other pests are present in the home. This includes destructive insects like termites which can do real damage to the home. Companies such as Moxie Pest Control will inspect the entire home to determine what, if any, steps need to be taken to get rid of the pests.
3. Appraisal Fees
Before a lender will give you a mortgage to purchase a home you will need to have it appraised. A real estate appraiser will assess the home to ensure that it is actually worth what you’re trying to borrow. It is several hundred dollars and, unfortunately, is a necessary expense.
4. Closing Costs
Separate from your down payment, you will be required to pay closing costs in associated fees when buying your home. This typically includes things like processing fees, title insurance, underwriting, and other fees. This is required up front upon signing your closing documents and can be several thousand dollars.
After the Purchase
Here is a look at some of the costs of owning a home:
1. Moving Costs
Soon after buying your home you’ll be ready to move in. Whether you decide to hire a moving company or rent a moving truck and do it yourself, it’s going to cost. Not only will you have to pay for the rental fees and gas or the movers’ hourly rate, you will also have to pay for the cost of moving supplies. The average cost of moving can be anywhere from $200 to $2000 according to some reports.
2. HOA/Condo Fees
If you’ve purchased a condo or a home within certain developments you will also be required to pay additional fees each month. HOA and condo fees are usually charged for things like lawn care and front desk attendants or security. While the fees will vary it averages around $100 per month.
3. Property Taxes
Homeowners are expected to pay taxes on their property every year. Property taxes will vary by your location, but can be several thousands of dollars per year. While you may not be required to pay your property taxes every month, it is a good idea to take the annual amount and divide it by 12. Put the monthly amount into a savings account each year so you aren’t hit at once with a big bill.
Did you know that in order to obtain a mortgage you have to have homeowner’s insurance on your property? Homeowners insurance provides financial protection in the event that an unforeseen event damages your property or personal belongings. These policies are often several hundred dollars per year and can be paid either monthly or annually depending on your contract. Again, it is best to save for it monthly to prevent a large bill.
Owning a home is a great accomplishment. It is also a significant investment and undertaking that will require continual upkeep. As you prepare your finances to buy your house make sure that you also take into account these hidden fees. Make sure that you have a nest egg saved to cover some of these expenses and budget for them monthly to avoid falling into debt.