4 Unexpected Costs of Home Ownership

Before buying a home, you are usually advised to get pre-approved for a mortgage first, which serves two important purposes — it lets real estate professionals and sellers know that you are serious about your intentions to buy a home, and it provides you with a good idea of how much of a mortgage you can actually afford.

However, with so much focus on the mortgage rate and monthly premiums, many homebuyers often don’t realize that there are many other expenses involved in buying a home, as well as unexpected costs of home ownership.

Additional Costs to Expect When Buying a Home

Using mortgage calculators or speaking with your lender can give you a pretty good idea of what your monthly mortgage payment might be, and if you can handle that, great! But you’ll also want to be aware of many other costs involved in buying a home so that you are financially prepared.

Closing Costs

Depending on what type of mortgage you are seeking and the cost of the house you are looking to purchase, closing costs can be a pretty large number. Although you are often given a closing cost document that provides you with a pretty close estimate of what you can expect to pay, there are still other expenses related to the mortgage process and closing that might not be fully detailed.

During the mortgage process, you will need to pay for a home inspection and an appraisal. You will also usually be required to provide an earnest money deposit, which is held in escrow and applied toward the closing costs when you go to closing.

Closing costs also might include payments to the title company, a closing attorney, and prepaid homeowner’s insurance and property taxes. All of this can add up to thousands. You might be able to wrap some of the closing costs in with the mortgage, but not all, so you’ll need to be sure you have the cash available or you won’t be able to go to closing.

Utilities

When you’re renting an apartment, sometimes the utilities are paid for. But even if they aren’t, utility costs are usually less than they would be for a home. Buying a home means you can expect to pay a lot more in utility costs, especially if you are buying a home in a state where utility costs are higher.

To get an idea of what you can expect to pay, you can easily look up average utility costs by state. But keep in mind that the numbers can vary based on the size of the home as well as the size of your family.

Home Maintenance and Repairs

Owning your own home also means you’ll be required to perform a lot more maintenance tasks, which also means you’ll need to purchase a lot of equipment you might not have needed before. For example, garden equipment such as lawnmowers, leaf blowers, hedge trimmers, fertilizer, sprinklers and hoses, etc.

You’ll need to pay for services such as exterminators, power washing, carpet cleaning, lawn treatment, tree pruning, and many other types of services depending upon your home and property.

If you have a deck, patio, fence, or pool, there will also be plenty of additional costs involved in the cleaning and maintenance of these in order to keep them in good shape. And your home may require painting at some point, windows might need to be replaced, or your ductwork might need cleaning. There will always undoubtedly be something that needs to be done that you didn’t figure into your regular monthly budget.

And then there are always unexpected repairs, ranging from a simple clogged sink to the need for a new HVAC system or even a new roof. While you might be able to handle many minor repairs yourself, you should always have a backup emergency fund at the ready to cover the unexpected costs of larger repairs.

Furniture and Appliances

Chances are you already have some furniture, but a larger house means you’ll likely need more. If you have additional bedrooms in your home, that means extra bedroom furniture. Larger living areas or dining rooms means you’ll want to get furniture or décor items to fill those rooms as well. And it is also likely you’ll need to purchase some new kitchen appliances.

If you have a deck or patio, you’ll want outdoor furniture as well. And then there’s a bunch of little things that quickly add up to significant expense, such as curtains, lighting, kitchen tools and utensils, hardware and tools, cleaning supplies, etc.

Of course, there are even more expenses involved in buying a home that might not be covered here, but by no means is this meant to deter you from buying a home. Rather, it is meant to better prepare you so that you can budget accordingly, build up an emergency savings account, and purchase your new home without any surprises.

There are also ways to save on many of these expenses as well. For example, when it comes to closing costs, you can use a secure electronic money transfer system for your earnest money and closing cost payments as opposed to cashier’s checks or wire transfers from your bank. An ACH transfer system is not only more convenient, it also saves you money on bank transfer fees, reducing your closing cost expenses.

For everything else, take the time to research and shop in advance. E-tailers such as Amazon offer a wide range of products to choose from for your home, and you’ll be able to compare costs and possibly save some money.

And many service providers such as exterminators and lawn care specialists offer deals for first-time customers. With ample research and careful budgeting and saving, you can save money and truly enjoy your new home without worrying about all the unexpected costs. You can also gain some insight and advice about the real estate process by checking out online forums and blogs to learn more about costs, fees, and any other questions you may have.

To learn more about using a secure ACH money transfer system or to schedule a free demo, head to paymints.io today!

Paymints.iois a fully electronic, secure, and compliant solution that eliminates the need for borrowers, buyers, sellers, and real estate agents to write paper checks. Our goal is to save you time, by avoiding lines at the bank; money, by lowering fees; and saving the environment by eliminating the use of paper and reducing CO2 emissions.