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%.