Budgeting for buying a home can be difficult enough when you’re just weighing mortgage options and a purchase price. But there are many other factors that go into the cost of homeownership. Some of them are one-time expenses that you’ll pay during the home buying process, while others will be recurring costs for as long as you own the home. Factor these hidden costs into your budget when you’re planning to buy a home:
1. Closing Costs
There are several smaller fees that add up to a rather large sum when you’re going through the closing process—loan fees, notary fees, underwriting fees, and more. Your escrow officer can provide an estimated closing statement for you summarizing many of these costs.
2. Appraisal Fee
Your lender will require an appraisal, and the appraisal fee comes out of your pocket. Ask your lender what you should expect to pay for your appraisal, but it will likely cost a few to several hundred dollars.
The few hundred dollars you’ll pay for a home inspection is money well spent, but it’s something you have to keep in mind during the purchase process. You’ll have the peace of mind of knowing the house is free from any major issues, and you’re making a smart, solid investment. Additional inspections, such as a roof or septic inspection, may be recommended depending on the property you are purchasing.
Not only is home insurance a wise investment, it will almost certainly be required by your lender. Further insurance, such as flood insurance, may also be required depending on your location.
5. HOA Fees
If you’re living in a property or community with shared spaces, you will most likely have a recurring homeowners association fee. This pays for things like trash removal, maintenance of common areas, and for recreational facilities like gyms and swimming pools.
6. Moving Expenses
Unless your new home is around the corner or you have a large group of generous friends, you’ll likely need some professional help to transport your belongings. The cost of professional moving help varies greatly depending on the level of service, moving distance, and the amount of furniture, boxes, and other belongings you need to be moved. If you are relocating for a job, many employers will help cover moving costs.