Deciding to purchase a house is one of the biggest decisions you will make in your life. Before you purchase a home, you need to make sure you are completely financially able to do so. Many first time homebuyers think this is limited to the down payment of your house, but this is incorrect. Here are the most common unexpected homeownership expenses associated with becoming a homeowner:
Closing costs are the one-time fees you have to pay whenever you close on home loans or refinance home loan. These fees help pay for things such as your pest inspection fee, loan origination costs, lawyer fees, title fees, and more. Closing costs are anywhere from 3 to 5% of the home’s purchase price.
When the seasons change, you are left with new factors such as changing temperatures or a difference in the seasonal pests. You will now have to think about keeping your home in optimal condition during the seasons. This could mean purchasing an air conditioning unit or paying someone to come take care of your pool during the off-season.
If you are renting an apartment, you might find that your landlord pays for certain things such as water, trash, or heat. Now that you’re a homeowner, you’re completely on your own to pay one hundred percent of your bills!
When you are renting, you can talk to your landlord about performing routine maintenance. When you own your home, you are in charge of the routine maintenance. This maintenance ranges from replacing the shingles on your roof to having your home reinsulated.
If you have 5% of the home’s purchase price saved aside for extra expenses, you are likely in a good financial place to purchase a home. Talk to your mortgage lender to ensure you are able to afford both the home and all the extra costs.