The Unexpected Costs of Purchasing a Home
Many first-time homebuyers focus on saving the money for a downpayment, and fail to realize that there might be thousands of dollars in other various costs associated with purchasing your home.
Some of these costs are fixed and most are standard, but if you aren’t expecting them, they can be very discouraging.
Closing costs can sometimes catch a buyer off guard, but the good news is that there are often assistance programs to help cover these costs, and in some cases, you might even be able to roll them into your loan, so that you don’t need to come up with all the money up front. Depending on the market and the home you’re buying, you might even be able to get the seller to pay for some or all of the closing costs! Here’s a quick rundown of what to expect in closing costs:
- Application Fee/Processing Fee
- Appraisal Fee
- Attorney Fee
- Title Insurance Fee
- Recording Fees
- Daily Interest Charge
- Homeowners Insurance
Moving and Housing
The other major expense that buyers forget about are moving and furnishing your new home! If you have little furniture and/or a group of young friends, you might be able to get off easy by renting a truck and buying your friends some pizza and beer in exchange for their manual labor. This option will probably run you a couple hundred dollars.
Once you’re firmly beyond your college years, plan on hiring a moving company. The average 3-4 bedroom home will probably cost $1,000-$1,500 to move (it always ends up taking longer and is more expensive than you thought), plus tips for the moving men.
Once you’re in your new home, don’t forget about these costs:
- furniture for your empty rooms
- rugs, wall hangings and window coverings
- outdoor furniture and bbq (if you’re moving to a place with a yard)
- paint and paint supplies (if you’re going to paint a few rooms)
- flowers and plants (to spruce up your yard)
And the list grows from there… Sure, a plant is only $8 but a nice set of curtains can be well over $100, and a fridge, if your new place doesn’t come with one, can be over $1,000.
So, be sure that your new home budget doesn’t just cover the down payment — leave an extra few thousand dollars for closing costs, and another few earmarked for “making your house a home”.
Got questions? Ready to find the home of your dreams? Call me at (310)926-2386 or contact me through this website!