Unexpected First-Time Home Buyer Costs You Must Know

Unexpected First-Time Home Buyer Costs You Must Know

First-time homebuyers are often shocked at the end when they buy a home because there are certain hidden costs that one does not estimate while buying a home. But if you know all the unexpected expenses present in buying a home then you can prepare yourself in a better way and you would not end up regretting your decision.

The expert movers at imoving.com state that most of the people forget to include the cost of moving while calculating the cost of a house. There are many such costs that must be included in the cost of buying your first home. This would help make a good strategy for buying a home. Check out different costs:  

  • Down payment: Down payment is a certain percentage of the whole price you will have to pay to buy a particular home. In the other words, it acts as a deposit on the application of the house purchase. One should calculate the down payment as 1% or 2% of the entire purchase price so that your application holds good and can be approved by the seller quickly. If the application doesn’t get approved, you might get back your payment.
  • Tax for the property: When you buy a house, you will also need to pay the official tax for the property, specified by the government. These tax rates vary with the different cities. Thus, before buying a particular house, keep in mind to compare different rates of tax prevailing at different areas, so that you can cut down a little amount of cost for yourself. One can also hire a lawyer to look after the same process. So, it is crucial to consider the property taxes while preparing your budget. 
  • Home improvements, and maintenance: Even when all the major home maintenance issues have been paid by the seller of the home, still there are certain costs that you have to pay by yourself such as the HVAC system cost, water heater, and other associated costs to it. Apart from that, if you want any kind of cosmetic updates then you should also be ready to spend the amount for these. 1% of the face value of the property is generally paid as maintenance expenses. Maintenance of the house consists of repairing various problems such as clogging of the pipes, electricity issue, leakage in the pipe, etc.
  • Inspection of the house: When the seller approves your application, before beginning the further process of purchasing the house, make sure to inspect the house carefully. One can also hire a certified house inspector which will cost you some bucks. The inspector is responsible to check whether there is any repairing issue in the house or not. And then one can accordingly negotiate with the seller.
  • Home insurance: If the buyer does not have sufficient liquid money, then he may go for the home loan. When buying a home by getting a mortgage, then you will be required to buy a home insurance policy. One can also go for a replacement cost policy to protect oneself from the loss that occurs due to fire or theft. The policy will provide you the value of your loss.
  • Utilities: Do you know utility charges are not less and for the subscription of the utilities, you have to pay a good amount. While buying a home, you don’t usually consider the amount of subscription of utilities therefore in the end, when you buy a home, you have to pay a higher amount.  
  • The security system in the home: When one buys a new home, it is possible that your home must have an already installed security system. And for your safety, you need to have access to the system. Therefore, one will need to pay some monthly or yearly fee to have access to the screen or recordings. If one finds the number of cameras short in the home, one can buy more to cover the entire house. According to the needs and preferences of an individual, specific security systems had been designed and you should be ready to pay these expenses. 
  • Furniture and window coverings: Despite buying a well-furnished house, one might have the eagerness to design the interior of the house according to their taste. And for doing the same, one might need to spend some bucks on the furniture or the window coverings. And both can be mush expensive which will increase the total cost of buying a new home.
  • Closing costs: Closing costs are the last mortgage costs to pay as a buyer. If your loan has been approved and your home inspection is done then you can take the keys to your new home. The mortgage interest, attorney’s fees, lender application fees, and other taxes are some other charges that you have to pay. Specific costs and charges vary from state to state. 

Wrapping it all up!!!

If you are considering becoming a homeowner then you don’t only have to make the down payment but also you have to spend a lot of extra expenses. You should look for all the above-hidden expenses so that you can prepare your budget well. Also, prepare yourself well for the moving process. It is a comprehensive process that has many steps.

John Norwood
John Norwood is best known as a technology journalist, currently at Ziddu where he focuses on tech startups, companies, and products.