5 Unexpected First-Time Home Buyer Costs
The process of buying a new home, particularly your first home, is one of the most gratifying things you will ever do. Although understandably complex, expensive and somewhat frustrating, the reward of having your own home is worth it all. As first home buyers, most people start this process with little to no prior knowledge and insight. As a result, most people are shocked and frustrated by numerous unexpected costs that they never knew about and definitely never prepared for. Not in your case because we are here to educate you. Let us give you a heads up.
Below are some of the common unexpected costs that you might have to bear as you move into your new home. Note that the costs will vary depending on where you live, what kind of home you buy and the lifestyle you want to adopt.
1. Closing Costs
Closing costs are probably the biggest shock for first time home buyers particularly because they are unavoidable. Depending on your area, the responsibility for paying the closing costs will vary. Some places allow the seller to pay some part of or most of the closing costs while in other you as the buyer bears the whole responsibility. Additionally, incremental costs such as transfer costs can increase the closing costs greatly. Closing costs can be a minimum of 3% of purchase price in some areas.
2. Mortgage Interest
In the case that you do not have the 20% down payment, you will have to bear a mortgage interest. However, you can eventually remove this payment with a refinance so it stops being a permanent cost.
3. Homeowners Insurance
Most mortgage loans will require you to have a homeowners insurance. This is meant to protect the home from natural problems such as hurricanes and floods. The cost will vary depending on the area.
4. Appraisals and Inspections
Buying a home is not cheap - it is most likely one of your biggest investments. As such, you need to make sure that you are making a wise investment. Inspections and appraisals help you meet this objective and should never be foregone. This can cost you between $500 to $800 but it is worth it. In all, you do not want to invest in a home that is not fit to live in.
5. Moving Day Costs
The best way to move is to use a professional mover. However, even though they will provide a quote of the expected cost, you need to be prepared for additional items such as cleaning supplies, new appliances among other pre-move in preparations. This will make the transition seamless.
For close to 60 years, Hug Condon has been the leading commercial and residential mover in New Orleans. With a vast wealth of experience, we will make your relocation a bliss. Talk to us today and let us handle the move-in stress for you.