Many of us know that you need to save a chunk of cash for a down payment. However, this isn’t the only expense that new homebuyers have to worry about. There are other out-of-pocket expenses that can quickly add up to the surprise of many who have never gone through the purchasing process. Here are some of the top expenses that you should be aware of outside of the down payment that can quickly add up.
Save for Closing Costs
Depending on the price of the home or property you are purchasing, you should plan to save anywhere between 2 and 5 percent of the price to cover closing costs according to “10 costs you haven’t factored into your homebuying budget.” Closing costs include the home inspection, appraisal, title company fees, property mortgage insurance if you are unable to put down at least 20 percent, closing fees, and other fees that may be relevant depending on the property. In light of this, many people want to try to save as much money as they possibly can, which ends up in them cutting some corners such as not getting a home inspection. However, in the end, it will be worth it to get the home inspected so you can factor in any problems with the house may have into the deal.
If anything is found during the home inspection, then you will need to be prepared to get it fixed before move-in day, or in the early days of ownership. Moreover, according to “4 costs you haven’t factored into your home buying budget,” you should create an emergency savings account to cover anything that may break in the first year of ownership. You will thank yourself for doing so because you won’t have to stress about how you are going to pay for repairs, especially if you have to put it on a credit card.
Factor in Moving Costs
Moving is quite the endeavor. Depending on how far you have to travel for the move, costs will vary. If you are able to use a few favors and get friends and family to help you move, then you can save a couple hundred bucks. However, if you are like me, and have moved countless times and are sick of it, spending the money to get professional movers may seem more worth it. Consult with your friends and family for recommendations. Get at least three quotes and make sure to check reviews of any company that you may potentially use to move you into your new home.
Other Things to Consider
If this is the first time you have owned a home, then you probably don’t own a lot of tools for maintenance of property such as gardening equipment. Furthermore, you may not have enough furniture and home décor to complete the living spaces within the home. Keep in mind how much you will need to spend to make the house 10 percent livable as well as what you will need to acquire over time to maintain the home yourself.