There’s hardly anything more exciting than finally being able to purchase your first home; it’s no secret that housing is becoming incredibly unaffordable in today’s shaky economy. But even so, buying a home is not impossible.
And if you’re still in the midst of saving for your down payment, we’ve listed all the costs you’ll need to afford to buy a home with confidence and peace of mind.
The Down Payment
Even though you can save as much as you want for the down payment, the larger your down payment, the smaller your mortgage repayments will be; you only really need to set aside 20% of the property’s value as the down payment.
It’s essential to save for this deposit as it will secure your mortgage loan. Once you have this amount saved, you can start browsing Tennessee real estate listings and listings in other areas of interest.
Next, you’ll need to consider the costs of homeowners insurance; this insurance policy is crucial when buying a home. Some lenders will also require proof of an insurance policy when applying for a loan.
This insurance policy will protect your finances in the event of theft, property damage caused by bad weather, and a few other costly unpredictable instances.
Your utility bill will include your water and electricity consumption and, in some cases, services like refuse removal. These ongoing monthly costs will vary depending on your consumption, but it’s crucial to add utilities into your budget when determining your affordability.
Property Maintenance Costs
It won’t do well to buy a home that you can’t afford to maintain over the years because this means the property value will plummet over time, and you’ll lose out substantially.
Determine the relevant services you’ll need to rely on and the costs of maintaining the types of properties you’re after. This will give you an estimated indication of how much you can expect to pay for maintenance on an ongoing basis. You can also evaluate a home maintenance checklist to identify all the relevant services.
Some general maintenance tasks include cleaning gutters, roof upkeep, plumbing, and HVAC unit maintenance.
Closing fees are the costs that you will need to pay above the property’s asking price. Sometimes, these costs are included in the asking price, although it’s wise to determine this detail before buying any home.
Closing fees typically include appraisal costs, title searches, surveys, taxes, credit evaluations, origination costs, and a few other small costs that really do add up.
While most realtors will be entitled to a percentage of the sale when you buy a home, it’s wise to inquire about the realtor fee structures when hiring one.
In some cases, realtors will be entitled to a large percentage, which will drive your costs up quite a bit.
Buying a property comes along with a lot of general costs and several hidden ones. Knowing everything that you’ll need to pay for when purchasing the house and what you’ll need to budget for as a homeowner is essential. Otherwise, you’ll find yourself in financial hot water later on.