When you buy a home, you expect to pay the agreed-upon purchase price. Unfortunately, buying a home often comes with many other expenses that you may not expect. Many homebuyers are surprised by expenses that come up during or after the purchase of a house.
Here are some of the additional expenses to be aware of and that may come up during your homebuying process, to help you plan ahead. Take these possible expenses into account before you buy, so you won't be surprised by them after you complete your purchase (when it's too late):
Closing Costs. You may be able to roll some of these into your mortgage or negotiate with the seller to pay some of them, but you will have to come up with some money when you close on your mortgage. You can expect to pay around 2 to 4 percent of the price of your home in closing costs, depending on where you live.
Taxes and insurance. Real estate taxes can add up to quite a bit per year, depending on your local tax rate. Since they are usually paid out of escrow with your mortgage, they will make your monthly payment higher than what you were initially expecting. You'll also need to pay for homeowner's insurance, as well as any additional insurances required in your area, such as for floods and wind storms. These are often required by your mortgage lender to protect their investment in your home.
HOA fees, condo fees, utilities. While homeowners association fees, condo fees and utilities such as water, sewer and garbage are often paid by the landlord when you rent, you will be responsible for them when you buy your home. Be sure you money in your monthly budget for these expenses. These extra costs can add up, but don't let them scare you off from purchasing your own home -- as long as you plan ahead for these added monthly expenses before you buy, you won't have to worry about getting in over your head.
If you truly believe you are ready to own your own home, or upgrade or downgrade from what you own now, contact us at the Schuck Group for an appointment. We'll help you find a home you love within a budget you can afford!