When it comes to being a homeowner, it’s easy to focus on the basics – look for homes within your budget / price range, check out your ideal neighborhood, get a pre-approved for a mortgage loan, and contact a real estate agent to get the ball officially rolling. However, when it comes to being a first-time homeowner, it can be easy to initially overlook the additional costs that come with buying a home. It’s more than just making a down payment and getting settled in your new domicile – there’s a lot that goes into the process, including moving from one home to another.
If you’re looking into buying a home for the first time and need extra financial guidance, our financial experts are available to members for any questions they might have.
Here are some of the often unexpected costs that come with buying a home:
Closing costs.
These costs comprise a variety of fees that are often roughly 3 to 6 percent of your new home’s loan amount. Some of these costs include:
- Appraisal fees
- Title insurance
- Lender fees
- Credit report fee
These costs are not necessarily universal, and can vary widely depending on a number of factors, including your home’s location, the type of loan you choose, and your home’s purchase price.
The cost of the physical move.
Moving from one home to another doesn’t usually come cheap, even if you opt for a DIY move instead of hiring movers. Keep in mind if you choose a DIY move, you’ll need to cover the cost of packing material and transportation, as well as any cleaning supplies for your soon-to-be former home.
Property taxes on your new home.
This is something that can vary – not necessarily just by state, but also by city or county/municipality. Because property taxes can be sky high in certain parts of California (and throughout the United States), it’s important to research what you’ll be paying depending on where you choose to buy a home. You can get a head start by using a property tax calculator that can give you an estimate narrowed down to your city or town.
Renovations and upgrades.
You’re finally a homeowner, and you’re free to make your home exactly how you want it (barring any rules from local HOAs) – so why not make a few cosmetic upgrades? While you definitely don’t have to break the bank to upgrade your home, it’s still an additional cost you’ll need to factor into your budget. If there are a number of changes that need to be made, make a list in order of priority and cost and work it into your monthly budget.