Last Updated on August 10, 2021 by woodcutter
Homeownership often comes with unexpected costs, especially if you’re purchasing your first home.
In this article, we’ve outlined some of the unexpected costs that you should factor into your calculations. Don’t worry; you can always be better prepared with adequate research.
The previous homeowner may already have performed a home inspection or two for you beforehand.
However, it’s better to err on the side of caution when it comes to your home purchase. You’ll want to have at least one thorough home inspection covering the general state of the house, along with a termite check.
If possible, try to be around when the home inspector is there so that you can better understand the inspector’s explanations..
When budgeting to buy a house, you’ll probably factor in the mortgage principal and interest first and foremost.
These two items are undeniably important, but there are several more numbers that you may need to include in your budget.
Depending upon the property value and the type of insurance you sign up for, you’ll want to factor in the amount you’ll need to pay annually.
There are also maintenance costs per year, which can average about 1% of your property value.
The costs of plumbing maintenance, electrical inspection and more can add up without you noticing.
Homeowner Association Fees
The HOA fees will depend on whether or not the area you live in has an active homeowner association, so you’ll have to find out about this yourself.
In some cases, even condominium buildings have their homeowner associations. You’d have to be a member of the HOA to purchase the unit and then pay an annual fee for the building’s maintenance and upkeep.
The costs would go back to keeping your neighbourhood in good shape, so you won’t need to worry about deteriorating roads and unkempt plants.
The older trees are always a sight to behold but can also be unhealthy from the lack of care they received over the years.
You could be at risk of these trees falling over and damaging your property, or worse, hurting someone else.
If your property comes with aging trees, you can contact experienced arborists such as JC Tree Services in Queensland to examine and assess the risk levels for you.
If the trees are no longer healthy, these same arborists can also cut down the trees safely. If there was minimal risk, you could also get the trees pruned to keep them healthy with a sturdy structure for the years to come.
Just when you thought you could finalize your home purchase, you then get another fee that you weren’t expecting – the closing costs. Your closing costs can range between 2 – 5% of your total property price.
The closing costs include several different expenditures, such as lender fees, escrow fees, attorney fees and more.
This payment would be added to the down payment when you decide on a property that you want.
More often than not, you’ll be spending more on electricity, water bills and other forms of utility than you did when renting a property.
Your previous landlord may have footed the bills for garbage disposal, housekeeping supplies and several other utilities, which are only known to you now that you’re going to have your own home.
The easiest way to gauge how much you may be paying in utilities is by asking to see the past bills of the previous homeowner.
If it’s a new property, you could ask your neighbours about their monthly utility expenses for a rough idea, although your utility usage pattern will vary.
Aside from paying for the building insurance itself, you may have to consider insuring your personal belongings and other home furnishings.
Contents insurance would cover many of your belongings, ranging from your rugs and windows to the new washing machine that you bought and other items that you store inside your house. The insurance premium that you pay will vary depending on the value of your possessions.