When you are buying a home, you are fixated on one price and that is the big one that you may be paying for over the next 30 years. While that is definitely the most important price, don’t let that be the only thing you think about. There are many other expenses you will encounter when purchasing a home and they could add up significantly. If you haven’t budgeted for extra items, don’t let them sneak up on you and cause your household budget to become unrealistic. Don’t be surprised by the necessary expenses you will encounter throughout the home buying process.
Here are some of the additional expenses you should expect when you buy a home. Take these expenses into account before you buy so you aren’t surprised by them at closing.
Closing costs. Closing costs are part of every home transaction and can add up to thousands of dollars on top of the price of your home. This cost will include but are not limited to: mortgage legal fees, stamp duty, bank fee, appraisal fee as well as conveyance stamp duty and legal fees and land title registry fee. Expect closing costs to around 4% of the price of your home.
Taxes and insurance. Real estate taxes vary greatly depending on the value of your property and the tax rate where you live. You will definitely need homeowner’s insurance and may wish to get content insurance as well. Make sure your budget leaves room for these items.
These extra costs can add up, but don’t let them scare you off from buying your own home. As long as you budget for these added expenses before you buy, you won’t have to worry about getting in over your head.
Even if you aren’t buying your first home, it’s easy to forget about some of these items when you get excited about a new home. Take a little time to plan your household budget before you get too far into the home buying process so you aren’t surprised by anything after you fall in love with your new home.