Are you thinking of moving or purchasing a home - we've detailed 3 costs when buying a new home below. There are many costs involved with buying a new home you should be prepared for. But have you thought of all of them? Read below to make sure you are prepared.
Costs When Buying A New Home: HOA Fees
One thing that is often overlooked when considering the costs of moving is HOA fees. Many people factor in the mortgage payment and insurance costs in their projected monthly budget but forget to keep in mind HOA costs. Your HOA also could require you to put down a deposit on shared amenities such as for a pool key or other community items.
HOA costs are tricky as well because they can rise considerably depending on the HOA and neighborhood costs. You'll want to leave a bumper in your budget for those rising fees.
Many HOAs bill quarterly but you'll need to keep that cost in mind when determining if you can afford your bank loan and insurance costs as well as overall home maintenance costs.
Costs When Buying A New Home: Cost Of Moving and Homeownership
Between movers and doubling down on utilities, moving costs can really rack up. But that's not the only thing that will cost you when buying a new home. Homeownership can be really expensive with the cost of maintaining the home and property alone.
'It is important to understand there will be additional expenses that come after the initial heavy financial investment. The first payment is only the beginning of being a homeowner. Maintaining your home does not come free of charge, especially, if you have four kids like me.
1.) THE COST OF RELOCATING AND MOVING
Most people may consider this a minor issue and possibly overlook it. It does not matter whether you are transporting your stuff, using moving company services or doing it yourself. The bottom line remains that there are costs accrued when moving from your current house to the new home that you bought. It is only logical to consider having savings set aside to assist in the move to the new house. Never underestimate the cost of moving and relocating, it is expensive and way more cumbersome than most people anticipate. When my wife and I moved this last time, we just moved about 6 miles away, even though it was so close we still had to hire movers. She was 8 months pregnant and I was in the middle of a huge acquisition. The movers were close to $1000 for 8 hours of help.
2.) LOAN REPAYMENT COST
Most homeowners have achieved their current status due to mortgage loans. It is important to research extensively to ensure that the mortgage option you pick is within your means. You will be liable to a monthly interest and principal amount payment towards the ownership of your home. I never let the banks and real estate agents determine what I can afford! When we went to get approved for our second home the banks told me I could buy and afford a home that would have been reckless for us to have ever purchased. The home we built was less than half of what the bank would have loaned to us. It is important for you to be in control of your financial decisions.
3.) MAINTAINING YOUR HOME AND UTILITIES
Being a homeowner means the responsibility of ensuring everything is in order. Replacing home appliances, landscaping and design, furniture and other decorations are among the expenses that you have to shoulder. These are among the most expensive additional costs especially if you employ the services of professionals. You need to be prepared for this if your home is to remain classy. Also – protip- it pays off big to just change your air filter. Doing the small things will save the big things.
When my wife and I got our dream 2 acres of land we made some big mistakes. A little planning can save you a lot of money and time. We didn’t know what we wanted out of our landscaping. So we decided to landscape every square inch of our property. We are literally spending hours upon hours weeding every week and now because I got sick my wife does it all alone. Not that we don’t love to pick weeds for 20+ hours but… So, as a result, we have re-landscaped multiple times to try to limit more work, which just adds more expense. If we had just planned it better, we would have avoided this time and money mistake.
4.) INSURANCE AND TAX PAYMENT
Property tax and home insurance are expenses that all homeowners have to factor in. These are monthly expenses that are inevitable and must be planned for in order to enjoy living in your new home. When Tessa and I built our house our taxes were assessed for the empty lot of land we had worth $60k. Then year after year it has jumped and our taxes have gone through the roof. Luckily, there are some things you can do to anticipate the jump in taxes. Refinancing can help the blow by getting a better interest rate. Plan and be prepared. This is crucial if you can’t afford your mortgage due to a rise in taxes year to year you have no business buying a home at that price point."
Costs When Buying A New Home: Change Of Drivers License, Government Fees, New Utility Costs
Another cost that comes with moving is utilities, changing government documents and other government fees. Even if you do not move states, you will need to update all your government documents with your new address. This includes passports, drivers licenses, and other important state documents.
Check with your local government to find out and be prepared for all documents that need to be changed. Check with your state as well to make sure there are no special government fees involved in where you are moving such as for water, easements or other matters.
Utilities will also be a cost factor when moving. This is something you especially want to be cognizant of if you are moving to a desirable area. When making a budget, factor in what your new utility costs will be as they may rise considerably. Also be aware that the first month you move you will likely have utility deposit costs and possibly paying double utilities at your new and previous locations.
We hope this overview of 3 unexpected costs when buying a new home will help you in your path to home ownership the smart way!
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