Submitted by: Chie Suarez
You have finally found the house of your dreams and you’re more than ready to live this new chapter of your life and furnish it to your style choice. But be mindful that you’ll be spending more than it seems. Are you ready to take on the responsibilities as a homeowner?
Before you purchase a house, keep this in register: the real value and amount you’ll spend on bills and other miscellaneous expenses amounts greater than the real estate listing. There are numerous expenses and hefty fees tangled with your investment first-time home buyers aren’t aware of until they are living under their own roof.
If you’re not ready for it, don’t be blindsided and naive. Keep yourself from serious debt, here are the true cost of homeownership potential buyers should be aware of.
1: Property taxes
This is a no-brainer. As an owner, you now have to pay property taxes every month. Instead of only calculating your rent, mortgage and other payments, do include in your budget a huge fee that could increase your monthly housing costs — property taxes.
Taxes are no good friends. They cut a large amount of our budget and they could only go up. Since there’s a possibility you can get a tax increase in the first year owning your property, do reserve an extra room in your budget for this one.
2: Inspection and Appraisal fees
Homeowners, do not skip this step when purchasing a home. This isn’t an option but rather a mandatory system you need to apply. Before closing a deal, pay for a home inspection for pests and to avoid flawed properties; construction costs and overpaying.
It could cut a large chunk off your money but it’s worth the pay. You’ll never know if the house needs repair and improvements the seller needs to cover the costs. Contact a reliable home inspector to aid you with this.
Also, prepare some cash for appraisal fees. Of course, before the bank approves your loan to purchase the property, they want to ensure you’re not being duped and you’re purchasing a good investment. Be sure to consult with a certified appraiser who can assess the value of the home.
It could cost you a few hundred dollars but it’s better than spending thousands for reconstruction and other improvements.
3: Homeowners Association Fee
This goes for renters as well. If the property you plan on purchasing has common areas such as looby, pool, club house, playgrounds, sewer, water and landscaping and the likes, expect to pay for HOA (Home Owners Association Fees). You’re required to pay for this fee in order to cover the maintenance of these common areas.
The shared services usually ranges between $200 up to $400 monthly and it could increase should there be other additional funds, repairs or constructions to cover the upkeep.
Landscaping is one among the best features of a home. However, your picture-perfect garden and landscape can be one of the major expenses you shell out dollars monthly.
Keeping up with your landscaping and its maintenance isn’t as anticipating as mowing your lawn every weekends. You’ll be needing lots of equipment to do the job such as a lawn mower, hose, sprinkler system, hedge trimmer, shears among others to keep it looking clean and fresh.
Also, let’s not forget about your plants. And if you hardly have time to trim your own lawn, you hire someone to complete the job which if you add up all these costs, can be quite pricey. Dish out a hundred bucks or more for your lawn services.
5: Maintenance, repairs and cleaning
You may not know it or it may show up late but chances are you’ll have hundreds of unforeseen maintenance and repairs to cover. It could be a non-working chimney, plumbing leaks or roof replacement. There are lots of possible maintenance and repairs in your exterior and interior alike.
You can’t run away from these expenses or if you ever leave it out longer before you take action, it could cost you more than it should have.
In addition, you may find yourself calling for a home cleaning service due to lack of time or inability to keep the house clean. You might also want to shell out of few dollars for that just in case.
6: Closing costs
Speak with your seller. Some buyers are lucky to negotiate with their seller for a contribution for this. You need to prepare an amount from 2% to 5% of the home purchase price.
Yes, there’s a fee for everything so you need to be wary and knowledgeable of what these expenses are so you can track your finances and budget it accordingly.
How’s your experience as a homeowner? Share us some tips and advices to keep up with the expenses. Leave a comment below!
About Chie Suarez
Chie Suarez is a passionate writer for PAAL Kit Homes, a company that manufactures and supplies steel-framed kit homes that help Australian families build their dream home. Chie has a deep interest in home design and decoration.
June 10, 2016