Becoming a first-time homeowner can be exciting, but it also comes with a lot of stress throughout the process. You'll have to spend time looking for the perfect home within your price range, go through the mortgage process, and then figure out the type of furnishing you want inside your new home.
The home buying process can cloud your judgment on how much you can actually afford to spend. You might focus solely on the listing price of a home instead of focusing on the overall costs of homeownership. If you look beyond the down payment amount and monthly mortgage payment, you'll quickly realize that there are hidden costs of homeownership that can add up rather quickly.
Home Inspection Fees- Why and How Much?
Each state has their own rules and the different types of home inspection a home buyer needs. These inspections are done to make sure potential issues that can't be seen with on the surface are examined before signing on the dotted line.
The exact cost for a home inspection will vary but you can assume it will cost around $318. This is determined by the size of your home and the type of inspection that is necessary. The inspector will check out all the essential pieces of your home which include your water heater, furnace, plumbing, foundation, roof, HVAC system, and more.
Homeownership typically means more space, and more space means more furniture. One of the biggest costs of buying a home is the cost to furnish your home. This includes a new TV, entertainment center, beds, couches, and the list goes on.
Part of the reason why we spend so much money on home furnishing is the excitement that comes with owning a home. You want a bigger and more up to date TV, a matching entertainment stand to go with it, and a big comfortable couch to host friends and family. The cost of furniture can add up quick, so you'll want to always leave some wiggle room when you decide on your budget for buying a home.
Repairs, Repairs, Repairs
This is probably one of the most frustrating aspects of being a homeowner. Taking care of your home plays a crucial role in determining your home's value. The last thing you want to do are home repairs right before you sell your home, so it's important to make sure you're on top of all the maintenance required.
The repairs can be as small as changing light bulbs, a faucet, or changing some hinges on a closet door. However, it can be as big as replacing a HVAC, installing new windows, or changing your entire roof. Changing your entire roof is one of the costliest repairs on your home that can go up to $25,000 but usually costs around $12,000 on average.
Increase in Property Taxes
If you're obtaining a mortgage on your home, your lender will typically require you to maintain an escrow account for your property tax and insurance. You may have to pay 6-8 months in advance for this as part of the closing costs. So if your annual property tax is $2,400/year, the lender will require $1,200-$1,600 to be held in an escrow account so the lender can pay the property taxes when it's due.
Another thing to keep in mind is the possibility of increasing property taxes. Depending on the state and county you live in, property taxes may or may not increase every year.
Most homeowners will end up doing some type of remodeling on their home. It can be as complex as adding bedrooms or finishing a basement or something as simple as painting the walls a brand new color. Different types of remodeling can add value to your home, such as updating your kitchen, adding new bedrooms/bathrooms, or installing new windows.
These types of home renovations may come with a hefty price tag. You can also think about going the eco-friendly route by going green, which may help save you money in the long run to recoup some of those upfront costs.
There's nothing more exciting than buying a new home. Buying a home can be a great long-term investment but you'll always have to make sure you're managing the property. Always be cognizant of the many costs that come with homeownership. If you're patient and diligent, you can find a great bargain while staying under your price target.
This article originally appeared on Avant.