Home Buying Expenses - Costs often Ignored

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You've crunched the loan rates, estimated your tax payments, and taken a realistic look at how much house you can afford. You've stuck within your range, being careful not to bust your budget.

But there are more expenses involved in home buying than just the property costs. And those additional payments, if you don’t factor them in, can be high enough to derail your meticulous planning.

Home-Buying Expenses: Add Them Up

Buying Costs You've got your loans pre-approved, but that’s not all you will need to fork over to get the keys to your new place. Services that need paying could be:

1  Your buyer’s agent fee

2  Property tax that may be pending

3  Payment of the fees to local home owners’ association or Resident welfare housing society

Moving Costs Moving into a home can involve major expenses for packing, storing and transporting your possessions and yourself. If you are moving across the country, the costs could be significant. Even moving across town can cost more than you planned for truck rental, movers and equipment.

Utilities Setting up your telephone, electricity, gas and water—did you budget for these expenses? They could cost more at your new place, especially if you’re moving to a larger home or from a rental.

New Stuff You may need to purchase appliances or furniture for your new home. Some items, like your old particle board bookshelves, may not be worth the cost of moving. Again, if you are sizing up, you face the potentially fun, but possibly financially draining, challenge of filling the new place.

Maintenance and Renovations A standard rule of thumb is to budget at least 1% of your home’s purchase price each year for home maintenance costs. Maintenance can include things such as painting, replacing roof shingles, fixing or upgrading plumbing and wiring. The amount you will need to pay for maintenance can depend on the age of the home, the previous owners’ upkeep and the climate.

Home-owner's Insurance You won’t be able to obtain a mortgage without home-owner’s insurance covering both the property and its contents. However, the standard insurance may not cover natural disasters such as floods and earthquakes. Depending on where you live, you may want to consider taking out additional insurance to cover such risks.

Please remember that all these costs put together can simply stretch your budget by 10-15%.

Make a decision to buy your own House - Take a Plunge

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You’ve saved for a down payment. You’ve pored over the local listings for months. Visiting houses has become part of your weekend ritual. But months, perhaps years have passed and you are still in your rental house.

For many first-time homebuyers, pulling the trigger on a purchase can be a frightening experience. Will you be happy there? Will you like your neighbors? Will you be tied down—house rich and cash poor? What if you lose your job? Will you hate your commute? In short, your fears stem from the unknown.

Still, there’s hope. Your family, friends and co-workers took the leap and are reaping the benefits. Give these steps a try and you could be one of them:

Firm Up Your Finances Anticipate the new costs that you will incur, such as taxes, homeowners insurance, utility bills and commuting. This will help determine the maximum price you can spend on a house. If your daily budget will change with a new home, consider a trial run living on that budget for a few weeks, to make sure you can. Enlisting the help of a financial expert will give you an objective view of your finances. Remember, the first year is the most difficult. After that you will begin receiving tax benefits.

Partner With an Agent Even though the Internet gives you access to endless amounts of market information, don’t be tempted to go it alone. Instead, interview several real estate agents and find one you like who listens to you. He or she can line up properties to view, answer many of your questions and make connections for you in your new community. Agents often have the inside track on new properties just coming on the market.

Accept Some Risk Realize that there is uncertainty in everything, but no matter what happens, you will deal with it. Ask family and friends about their experiences and learn from them. Be sure to keep some cash reserves in the bank as a safety net. And remember, you have homeowner’s insurance for a reason.

Fine Tune Your ‘Must-Haves’ Is there a community that you absolutely must live in? Are you adamant about a view or a floor? Make your list of what’s vital. You may find that you are willing to sacrifice one feature if the rest are fabulous. If you are not crazy about the house, don’t bid. It’s important that you love it at the outset.

Take a Plunge Regardless of the market, great houses do not stay available for long. If you love it, be ready to take a plunge. If you are wavering, ask yourself, “How will I feel if I don’t get this house?” You might just get it.

Reap the Reward Owning a home can be one of the most exciting and satisfying things you will do in your life. It’s an investment that can pay you personal dividends as well as financial benefits

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How to start when you want to buy your own House

Buying a house is one of the biggest investments that one makes in his/her lifespan. Therefore it requires all the due diligence and homework. Present below are some of the key questions that one must ask to have a safe transaction:

Title: Do not buy a house/property if the title is not clear as the financial institutions refuse to finance such properties and may cause problems in the future. The best way is to approach a consultant or financial institutions to know whether the title of the house/property is clear.

Documents: Ask the builder whether he has all the documents relating to the property of the house. Take duplicate copy of the same and have them verified with a property lawyer.

Approved Layout: Ask for a copy of approved layout of the building from your builder or seller of the property. Ensure to buy a house that has the building and construction plan approved by the respective municipal authorities and the property is termed as NA (non agriculture). Also ensure that the land is not a trust land, forest land or in possession of some other body.

Intimation of Disapproval (IOD): IOD is set of instructions, given by the respective authorities to builders for constructing the building in a minimum period of time. Ask the developer for the same.

Water & Power: Pls check from the builder whether the property has adequate water supply and there is no problem of power such as voltage fluctuation etc. Voltage fluctuation can cause severe damage to your home appliances and put stress on water as well.

Facilities: First things first. Ask the builder for the access roads and nearby facilities. Though it is the  responsibility of the government to provide for roads, ask the builder if there is a plan passed by the local municipal corporation for such access roads. Also ask for the internal facilities like lift, garden, parking, and other amenities that may have been advertised for. Ask him the time it will take to provide for  those facilities. Also ask for  the additional cost that one will have to bear for such facilities.

Quality of construction: Ask  the builder for the quality of material used in the construction (quality of the internal walls, flooring, sinks, bathroom fittings etc.). You may check some of the other constructions of the same builder and have a look at a sample flat. Also ask, if the material used in sample flat will be the same as in original flat.

Factor in all expenses: Last but not the least, consider all costs included in the purchase of the house. Generally, buyers are informed about the marketable rates. Please ensure to check all other costs involved. Some the important costs incurred for buying a property are: floor rise and premium location, parking charges, registration and stamp duty, service tax, notary and legal expenses. Also ask the  terms and conditions for the payments very clearly. Also important to know is about the maintenance cost and the actual time when the payment starts.