Hidden Home Owner Costs

Budgeting for buying a home can be difficult enough when you are just weighing mortgage options and a purchase price. But there are many other factors that go into the cost of home ownership. Some of them are one-time expenses that you’ll pay during the home buying process, while othes will be recurring costs for as long as you own a home.

Closing Costs: There are several smaller fees that add up to a rather large sum when you’re going through the closing process-loan fees, attorney fees, underwriting fees, and more. They typically add up to 2-5% of the purchase price.  For a $300,000 home-roughly the national median-that’s in the neighborhood of $10,000, so be sure to budget for it.

Appraisal: YOur lender will require an appraisal, and the appraisal fee (a few hunderd dollars) come out of your pocket.

Inspection: The few hundred dollars you’ll pay for a home inspection is money well spent, but it’s something you have to keep in mind during the purchase process.  You’ll have the peace of mind during the purchase process.  You’ll have piece of mind of knowing the house is free from any major issues, and you’re making a smart solid investment.

Insurance:  Although homeowners insurance isn’t legally required, it will almost certainly be required by your lender.  Further insurance, such as flood insurance, may also be required(depending on your location).

Home Owners Association: If you are living in a property or community with shared spaces, you will almost certainly have a HOA fee.  This pays for things like trash removal, maintenance of common areas, and for recreational features like gyms or swimming pools.