The True Cost of Buying A Home
When you are looking to buy a home, you may only be looking at the purchase price of your potential home. You have been approved for a certain amount by your lender and that is the number you are focusing on. But, there are many other costs that people do not necessarily consider when it comes to the cost of buying a home and they can be shocked when they have to come up with these funds.
One of the first considerations when you are buying a home is the closing costs. These are fees that you will have to pay the lawyer which covers land titles, possible property taxes (depending on how the current owners pay) and their fees for doing the work. As a buyer, you should not have to pay the realtor as they are paid when you purchase a home by the seller.
If your home is brand new, or being built for you, this may not be a requirement for your mortgage. But if your home is more than five years old, or you have concerns about it, a house inspection is a good idea. This will likely run you a few hundred dollars and can be done within a few days. An offer is usually made contingent on what is found in the inspection as you can use it to negotiate for a better purchase price if there is work that needs to be done. That inspection may also find some items that need further inspection, such as a note that there seems to be an issue with a furnace but the inspection itself does not cover that and you will need a separate inspection done.
It's very likely that when you purchase a new home, you are going to find some repairs or improvements you need to do. Painting is a common expense to consider in determining what type of costs you may incur when you are buying a new house. But you may find when you get possession that there are things that you did not look at and they need a bit of work. For instance, maybe a tap in the bathroom doesn't work as well as it should and you need to replace it. Maybe the prior owners left a lot of big holes in the wall that are going to require you to do some wall repairs. These all add to the cost of buying a home that you may not have considered.
Chances are that you have a budget for furniture for your new home. But, are your estimates correct? Maybe you planned to buy a certain couch but when it comes to actually buying it, that model is no longer available and you need to make a second choice. Your new home could be bigger than you had planned to buy and as a result, you need to purchase more than you had planned to. Appliances may not come with the house or you may decide when buying appliances that you should spend the extra money to buy the stainless steel. Fifty dollars here and there adds up.
It is always a good idea to add a contingency plan in regards to financing when you are buying a new home. There tend to be those costs when buying a home that you did not think about and they will add up over time. Even things such as kitchen appliances and towels add up and before long, you have no money and no money for a shower curtain or kitchen towels.