The sticker price of a home is not the total that you’ll pay to buy the home. In an article from Realtor.com, experts advise homebuyers to know the hidden costs of buying a home and to prepare yourself financially for these costs. “This can, in turn, help in your home purchase decisions, enable you to avoid a lot of stress, and even reduce the possible need to go into debt at a later stage”, according to Realtor.com.
So what are the hidden costs that you need to be aware of?
Appraisal – Cost of hiring an appraiser to make sure that the house you’re considering buying is priced appropriately
Home Inspection – Cost of hiring a home inspector to check for any serious problems with the home (usually structural problems are inspected)
Taxes – Local and State taxes on the purchase; property taxes are, on average, 1.38% of the value of the home
HOA Fees – Homeowners Association fees or Condo fees, depending on where you are moving.
Homeowners Insurance – Homeowners insurance covers both the property and its contents. You may need to pay more for insurance if you live in an area that is prone to floods, tornados, earthquakes, or other natural disasters not covered in standard insurance packages.
PMI – Private Mortgage Insurance (PMI) if your down payment was less than 20% of the purchase price of the home.
Moving costs – including transportation of furniture, cars, and other belongings. The cost of moving will vary based on what you’re moving and the distance you’re moving.
Updates – Costs of replacing faulty or out-of-date appliances or fixtures in your new home
Cable – Cost of installation of cable, internet, and/or phone services in the new home
Regular maintenance costs – such as repainting, replacing roof shingles, replacing furnace and air filters, and more. Realtor.com advises budgeting at least 1% of the home’s sticker price to pay for home maintenance costs.
Costs for renovations/remodeling/repairing – Depending on the age and condition of the home you buy, you may need to set aside money to cover the costs of repairing, renovating, and/or remodeling parts of your home.
For more information on the hidden costs of buying a home, check out this article from Realtor.com: