You have found the perfect home, you think you can afford it but have you taken into account the hidden costs of buying a home? Many first time home buyers assume that all you need to do is find a lender and pay a down payment, but there is more to it than that.
The hidden costs for first time buyers can be quite shocking; in fact, because they don’t take them into account when drawing up a budget they end up using up their savings. Before you jump in, take into account the following costs:
• Homeowners association fees – if you buy a property that has a homeowners association you will need to pay this either monthly or annually. The same applies with Condominiums, where you have condo docs and a condo fee.
• Interest – there is an interest fee in every mortgage, and as you are choosing a lender you should look at how much they charge. If the interest is too low be careful – you will pay it in additional hidden costs.
• Closing costs – you will need to pay quite a bit to all the people and institutions involved in closing your home purchase.
• Maintenance costs – your new home will need to be kept in good condition whether or not you intend to sell it down the line.
• Property taxes
• Home insurance – make sure to get as comprehensive a package as possible.
• Utilities – power, water and others all have to be paid for each month and should be taken into account.
There are other things that you should look out for. The first is the roof. Roofs are not cheap, and you don’t want to buy a home only to call in a roofer a few months later. You may pay more for a home with a newer roof, but is saves you the cost of replacing.
Look at the structure itself – how sold are the walls, how good are the windows and doors, how is the attic and basement? The condition of the structure tells you how long it will be before you need to do repairs and replacements. Insulation is also important as it will save you a lot in the way of power bills, and it will also make your new home comfortable. You should call in a professional to look at the quality of insulation.
Next, look at all fixtures and fittings. Many new homeowners move in without checking whether taps, power switches and others are in good working order. If you have a dripping faucet or a faulty switch you will have to repair them art your own cost.
It is important to check these things before you buy so that the seller can either factor them into the sale price or repair them. Check the surrounding property as well. You want to buy a home that is situated on good ground. If you buy a home in a valley in a flood prone area, for example, you can expect to pay flood insurance. These tips should help you find a home that you will enjoy living in.