Whether you work from home or not, buying a house is an exciting but stressful experience. After you think you’ve saved up enough for the purchase, there are hidden costs that you weren’t aware of. It’s important to keep these costs in mind to ensure you can afford your home.
10 “Hidden” Costs of Buying a House for New Homeowners
While many of the hidden costs on this list aren’t actually hidden, they’re not considered at the time of purchase. Here are 10 hidden costs all new homeowners should be aware of.
1. Inspection Cost
When buying an older house, many buyers opt for a professional inspection before finalizing their purchase offer. It’s recommended that this inspector be independent of both the seller and buyer to avoid any biases, but this means your inspection costs could be as high as $600.
2. Appraisal Fees
Most lenders require an appraisal or valuation report before giving out loans for houses that are already built. The appraiser assesses what kind of shape the property is in, which affects its worthiness as collateral for a loan. Appraisal fees are $300 at the minimum but are often higher.
3. Property Taxes
Once you own a home, you are responsible for paying property taxes. Your property taxes will increase every year and could be high if you live in a prestigious area. Property taxes can range from 0.5% to 3% of the purchase price of the house and comes out as a yearly lump sum.
4. Mortgage Insurance
It’s very important to compute your home loan expenses before buying a house, as a decent down payment can save you thousands. If your down payment is less than 20% of the cost of the loan, you’ll need to pay 0.5% to 1.5% extra on the loan per month for mortgage insurance.
5. Home Insurance
While you don’t need home insurance, it’s recommended that you buy it to protect your property from damage. On average, homeowner’s insurance premiums can run anywhere between $500 to $1500 per year, but it’s worth it if you live in a state that experiences harsh weather.
6. Moving Costs
Even though hiring movers might seem like an unnecessary expense after investing in a house, it can save you a lot of time and money. Rates vary by location but expect to pay at least $500 to $1000 for a local move or upwards to $10,000 for an interstate or international move.
7. Closing Costs
Closing costs are often overlooked because it’s assumed that they’re a part of the house purchase. However, closing costs include everything from mortgage interest fees to attorney processing fees. On average, closing costs add up to 3% to 6% of the total home sale.
8. Landscaping Costs
Tending to a lawn every single week can be expensive, and it’s much cheaper to replace it with stones or astroturf. But if you want to keep a lawn or a vegetable garden, your landscaping costs will rise significantly. A small lawn can cost you $50 to $300 every single month.
9. Home Repairs
When you live in an apartment, you never have to worry about repairing your dwellings out of pocket. Once you have a home, you’ll have to spend money maintaining your HVAC systems, replacing windows, and anything else that pops up. This can add 1% to your total home cost.
10. Pest Control Services
After purchasing a home, it’s in your best interest to call a pest control service. You never know what could be lurking in the walls, basement, or attic, and it’s better to be safe than sorry. If critters keep entering your home, you may want to call a pest control service more often.