You’re excited because you just found the perfect home. The neighborhood is great, the house is charming, and the price is right. But the asking price is just the beginning. Be prepared for additional — and often unexpected — home-buying costs that can quickly leave you underwater on your new home.
Expect the unexpected
For almost every person who buys a home, the spending doesn’t stop with the down payment. Homeowners insurance and closing costs, like appraisal and lender fees, are typically easy to plan for because they’re lumped into the home-buying process, but most costs beyond those vary.
The previous owners of your home are the biggest factor affecting your move-in costs. If they take the refrigerator when they move out, you’ll have to buy one to replace it. The same goes for any large appliance. You’ll also be on the hook for any immediate improvements the home needs, unless you negotiate them.
Hire a home inspector – which costs money too – to look for any hidden problems. If an inspector discovers a serious problem, then you’ll have to decide if you still want to purchase the home.
Consider the creature comforts
Another cost is your own comfort. There are a number of smaller considerations you may not think about until after you move in such as is your new home wired for cable?
If you’re moving from the world of renting to the world of homeownership, then you’ll probably be faced with higher utility bills. You could also pay for utilities once covered by a landlord – like water and garbage pickup.
Plan ahead
The best way to prepare is through research and planning. Start budgeting before house hunting and throughout your search. Look at homes in your budget that need improvements, and then research how much those improvements could cost.
Say you find a nice home that’s priced lower than others in the area because of its age. You may save money on the list price, but with an older house, you could be slapped with a much higher home insurance payment, making the house more expensive in the long run. Ensure you research home insurance and property prices in the areas you’re considering.
Clearly define how much you intend to put toward your down payment, and then look at how much cash that leaves for improvements and minor costs. Before starting the house hunting process, contact DiVito Dream Makers to help you find and buy your dream home!
Article originally appeared on Zillow.
