With increasing rents, especially for those living in New York and San Francisco, it may be wise for you to step up from being renter to a homeowner. However, here's a first-time homeowners tip for you -- there are still "hidden" costs that come with the purchase.
According to Realtor, there are several costs in buying a house.
Know the 5 overlooked costs by first-time homeowners:
1. Buying Costs
After the bank has approved your mortgage for a house you chose, don't forget there are still some costs in this initial stage. You have to settle for the appraisal fees, inspection fees, broker's fee, lawyer's fee, homeowner's insurance, and property taxes, as advised by the Realtors' association.
You cannot abstain from paying these fees because they are paid for legitimate and important reasons. For instance, you need to pay an appraisal fee so that you will know if the asking price of the owner is the relative market price for that area. A thorough inspection is necessary to know if the property has certain structural issues or may pose health concerns like having pests, notes Realtor.
The broker's fee is given for their professional service -- the realtor helped you find the property that suits your needs and even helped you clinch a better deal. The property taxes are strictly imposed and may vary depending on the area. You also need a lawyer to help you understand the contract and offer you legal advice about it.
An insurance is also needed to cover the property in case of untoward events like fire or natural calamities. It also varies depending on the type of property and location, notes RealtyTimes.
2. Moving Costs
Do not take this lightly, as moving costs -- from the preparation or the packing to the unpacking and organizing of your things in your new home --may just spell headache. Still, you must set aside a budget for all the necessary materials like boxes, containers, and even gas if you are transporting them yourself. Plan carefully. You would not want to have several trips from your old home to your new home. That would be too costly. Ask your friends for help to lessen the cost.
If you will be coming from a different state, transporting your old things may be a hassle. Try to dispose some items you may not need via a garage sale.
3. Setting-up the Utilities and Miscellaneous
If you have purchased a new home, you might need to set-up some utilities that have not yet been provided for you. There may be water and electricity, but check others like cable, telephone, and gas if they are yet to be installed.
You should be well-informed about your community or subdivision's Homeowner's Association fees as well.
4. Change of Furnishings
Chances are you may need to buy new decors that fit your new home. If you have moved from a smaller apartment to a bigger house, you may consider buying new appliances, too. However, you do not need to do it in one go.
5.Maintenance and Renovations
When you were renting, perhaps, most of the repairs were done by your landlords, unless stipulated in your contract.
Now, every repair and renovation cost will be coming from your wallet -- paint, cracks, faucet leaks, gutter fixes and many more.
Be wise and set aside some money for emergency repair costs, says Realtor.
So, if you are buying a house, consider these costs in your budget and not just your mortgage payments. Some homeowners didn't realize that and then started defaulting in their loan. Avoid facing foreclosures by incorporating these in your budget.
Still, congratulations on your decision to be homeowners!
