6 New Expenses for First-Time Homeowners
Whether you were just approved for a home loan or you’re considering becoming a homeowner in the future, there are a few expenses within the first year that come with the journey aside from the initial down payment.
Don’t let auxiliary expenses create sticker shock or catch you off guard...review our checklist for every first time homeowner before finding the perfect home.
Closing costs can include a variety of fees and are based on where you plan to live. The overall closing costs total can be somewhere between 2 to 5 percent of the total cost of the home. Some of the fees for closing costs can include: lender application, title insurance, mortgage taxes, and attorney fees. Speak with your mortgage loan officer about potential closing costs specific to your state.
Homeowners insurance can protect you in case something happens to your home, such as earthquake, flooding, fire, etc. and rates can vary based on where you live and if that area is prone to natural disasters. While this can typically be included in your monthly mortgage payment, the cost for real estate taxes and homeowners insurance may change year over year depending on your homeowner’s insurance premiums.
Property tax on your home is an annual expense and is commonly included in the disclosure of the home listing. This tax will vary based on where you live. The homeowner can usually choose between dividing this total within his/her monthly mortgage payments or pay it on a separate bill. Learn more about the calculating home buying expenses with our free, online calculators.
After your first home inspection, there should be a general list of items that will need to be replaced immediately or in the near future. This list could include major appliances, electric, plumbing, heating/cooling systems and more. It will be beneficial to have a portion of your emergency savings dedicated to immediate emergency repairs and have some saved for when it’s time to replace or repair part of the home before it becomes an urgent situation.
Utility costs can be a large item on the monthly budget line, especially if a new homeowner doesn’t know what to expect for the first season in his/her home. From lawn care, to water and electric bills, it may be a wise decision to do some research about the average costs for each utility in neighborhoods of interest.
The cost of moving from one town to the next one in the same county would be a less expensive move than if you’re coming from across the country (and if a new employer is helping with the overall cost of the move). Regardless of the distance, you may want to hire professionals to move your belongings and that should be noted for budgeting expenses before choosing the location of your big move.
Your home buying experience should be a positive, memorable one. If you’re ready to make the big move (or just considering it), try our simple and free HomeAdvantage program to help you search, buy, or sell a home and find local agents to work with you—and even save you money at closing. Questions about homeownership? Contact our friendly, knowledgeable mortgage loan officers through our online contact form or call 1-877-269-4179.