5 Homeowner Costs To Budget For
Budgeting for buying a home can be difficult enough when you’re just weighing mortgage options and a purchase price. However, there are many other factors that go into the cost of purchasing a home that often get overlooked. 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.
Here are a few homeowner costs that you need to factor into your budget when you are planning to buy a home.
1. Closing costs
Your down payment is not the only thing that you need to bring to the closing table. Throughout the loan process there are several smaller fees that can add up. These fees may include application fees, title insurance, and recording fees, to name a few. These closing costs can potentially add up to 2-3% of the purchase price so it is definitely something you want to budget for.
2. Appraisal
Typically the lender will want to have an appraisal done for the property that you are purchasing. They do this to make sure that they are making a good investment and not loaning more than the home’s value. Appraisal fees can run a few hundred dollars.
3. Inspection
The money that you will 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.
4. Insurance
Although homeowners’ insurance isn’t required by law, it will almost certainly be required by your lender. Depending on the location of the home, other types of insurance could also be required like flood insurance.
5. Homeowners Association
If you are purchasing a property with community shared spaces, you will probably encounter HOA fees. This fee pays for things like maintenance of common areas, such as parks, swimming pools, or a clubhouse. Some HOA fees may even cover a portion of the utility costs for the home. Each homeowners association is different and fees and amenities will vary.
If you would like an estimate of what your homeowner costs might be, reach out to one of our knowledgeable loan officers.