The Hidden Costs Of Buying A Home
/When it comes to upfront costs when buying a home, most people budget only for the down payment. But quite often there can be many other costs to consider. Here are just some of the upfront costs to budget for when buying a home.
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PMI
Putting down a deposit of less than 20% on a home? You may have to take out private mortgage insurance (PMI). This can be paid up front or it can be paid monthly as part of your mortgage repayments. A lot of people choose the latter option - this means bigger monthly bills, so be wary of this.
Other insurance costs may also sometimes be required such as title insurance and homeowner’s insurance.
Appraisal fee
You’ll also need to pay your mortgage lender an appraisal fee. This is a check to ensure that the property is worth the value that you are requesting to borrow. This fee usually paid towards the beginning of the mortgage application process.
Mortgage lenders may also charge other fees during the application process such as credit report fees and escrow fees. These are worth enquiring about in advance.
Home inspection fees
A home inspection is not always obligatory when buying a home, but it is usually recommended. This ensures that there’s no hidden damage that could result in costly future repairs. For instance, an experienced company like Texas pest control aptive can inspect your home for pests if desired, safeguarding against infestations that may otherwise go unnoticed. There could also be local issues such as flooding and sinkholes that can be looked into.
The cost can depend on how thorough you want the inspection to be. It’s worth shopping around to find a reputable home inspection company within your budget.
Legal paperwork fees
You’ll usually need to hire a solicitor to handle all the paperwork when buying a home. Such specialist solicitors are called conveyancers. Handling this paperwork on your own is not advised unless you have legal training due to the complexity of it.
As with a home inspection company, it’s worth shopping around to find a conveyancer so that you get the best deal. These fees are usually paid towards the end of the process.
Moving costs
Moving costs are something to also budget for. You may be able to rope together a few friends to help with the move, but if you’re moving over a lot of possessions or moving long distance, hiring a professional moving company will often be better suited.
Spend time shopping around to find the best moving company within your budget. For interstate moves, you’ll generally need to hire a specialist moving company.
Home Warranty
Once you are settled in the home, you may wish to consider purchasing a home warranty agreement. A home warranty is a service contract that offers complete maintenance protection and covers the costs to repair expensive home systems and appliances. It will be an upfront cost, but it can save you a lot of money in the long run.
Property tax
Property tax is usually paid as a monthly cost. However, it’s possible that you may owe the seller some property tax immediately after buying the property, depending on the length of the buying process. Make sure that you’re not caught out by this by having some money left aside.
About Money & Mimosas: Money & Mimosas was started as a passion project by Danetha. A former NFL cheerleader turned entrepreneur, she started blogging as a way to combine all of her passions into a career. Now, Money & Mimosas is read by thousands of women in over forty countries with the same dream of living the rich & sexy lifestyle.
