By: Carolyn Smith
Buying a home is a huge financial decision but there are some other expenses you may not think about when buying a home. In order to avoid being thrown off financially consider all of the following things that you should budget for when purchasing a home.
When purchasing a home the inspections, appraisals, commissions, and fees can all add up rather quickly. The buyer may also be responsible to pay back property taxes that the previous owner had already paid, pay for oil that was purchased by previous owner or take care of HOA costs. Don’t be thrown off guard by closing costs and keep track of the expenses you accrue along the way.
Along with your mortgage you will be responsible to pay yearly property taxes. Your real estate agent should be able to provide you with the property tax amount, but don’t “bank” on that number staying the same from year to year, especially if you plan on making improvements or adding on to the home.
Utilities can take a huge bite out of your monthly budget. Be sure to consider the size of your new property when budgeting, especially if your new property is larger than your last.
Home insurance is one expense that you don’t want to skimp on! Your new investment needs to be taken care of and home insurance policies compensate you for potential damages and losses to your home and possessions. There are a number of different companies and polices to choose from, so make sure to choose the coverage that is correct for you and your needs. Typically coverage includes, storms, fire, theft, and vandalism, but areas prone to bad weather should consider flood and earthquake coverage.
Maintenance, maintenance, maintenance. We’re not talking mowing your yard or cleaning your toilet; we’re talking the big stuff. Painting, replacing shingles on your roof, plumbing issues, the list could go on and on. A good rule of the thumb to follow, set aside at least 1% of your home’s purchase price each year to cover maintenance costs that might pop up.
And last but certainly not least, budget for new stuff! Take an inventory of what you already have and think about what you need for each room. This should give you an idea of how much you may need to save to purchase some new items for your new home!
Buying a home is an exciting time and our agents are here to help you from the start of the buying process to the end! Let DLP help you find your dream home!