The Hidden Costs to Buying a House
Although it’s a well-known and oft-spoken fact that buying a home is likely the most expensive purchase you’ll make in a lifetime, there is little talk of what this huge sum of cash is being divided into. Most people just assume it all goes toward the cost of the house, but the fact is that there are numerous little fees and costs that are associated with making new home purchase – and if you aren’t aware of them, they can take you by surprise.
1. Closing Costs
These are things such as the Origination Fee (what the bank charges you for making out a loan), Discount Points (what the bank charges you for getting a lower interest rate), and Appraisal fee (the bank will hire an appraiser to value the home – they don’t want to loan you more than it’s worth, after all). There are even more little costs like this that you might find, but some can be negotiated away on occasion. Still, these various fees can run you as much as 6 or 7 percent of the sale price. So be aware of what you’re paying, and find a good closing cost calculator online to make sure you aren’t paying too much.
2. Inspection Fees
Don’t be surprised if, before closing, you have to pay for various inspections of the home to be done (for pests, mold, damage, etc.). However, it’s probably a good idea to splurge for these services so you truly know that the home you’re buying will live up to its value.
3. Utilities, garbage, HOA fees, and more
These are all the little post-purchase fees that you’ll want to know about before actually buying the house. They’re things that you may not currently be paying for, so you’ll need to know what they are – for example, paying for separate utilities, for garbage pickup, or for Homeowner’s Association fees.
4. Exterior Maintenance
If you’re used to living in an apartment, and this is your first house, prepare to pay for plenty of yard and home maintenance – this’ll probably be the first time you’ll have to mow since Dad made you do it in high school. And if you don’t want to do it, prepare to pay a law care crew to take care of it. Some high-end communities provide these services, but don’t expect that sort of luxury treatment for your first place.
5. Moving Costs
If it’s a big move, don’t expect all your worldly belongings to fit in the back of your station wagon. You’ll probably have to either pay for a professional moving crew to take the work off your hands, or get a few friends to help. And if you do find some willing buddies, don’t forget to buy them lunch.
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