Additional costs that first time home buyers should know about

Additional costs that first time home buyers should know about

When you are buying a house especially if it’s your first there are many expenses that you might tend to overlook. Knowing the exact cost of your house is one of the most crucial steps in your home buying process. Here are some of the expenses that you should prepare to incur.

As a homeowner, you will need to take out an insurance policy to protect yourself against risks such as fire or theft. Also, consider taking out extra insurance for areas prone to natural disasters such as earthquakes. Do not forget to take mortgage insurance in case you are unable to pay your mortgage. You can choose to include the premiums for these insurance policies in the mortgage repayment so that they don’t bring inconvenience.

You should be ready to pay property taxes calculated depending on the value of your property. They are indicated during the listing at a 1 or 2 percentage of your property value. You can choose to spread them throughout your mortgage repayment plan or pay them annually.

As a homeowner, you will incur frequent home repairs and maintenance costs. As a first timer owner, this can be new to you since you were used to having someone else cover the cost. Get people who you can rely on and are a phone call away when you need some work done around your home. You will also need to buy equipment’s such as lawn mowers for some do it yourself task to save on these expenses.

Not all homes come with major appliances. Even when your home comes with appliances, you will still need to add some more. You will also have to purchase some furniture, curtain or utensils if you do not own any or if the space you have is too big for your collection.

When at the closing stage of your home, you will have to cover closing costs for real estate title insurance, attorneys and preparation fees. Sometimes your seller might cover these costs, but it’s advisable to set aside some cash just in case they don’t.

To show the seller how serious you are about purchasi9ng the property, you can set aside some earnest money to present to them with your offer. Depending on the property, it can range from 5 to 10 percent. Your money is returned to you in case the seller rejects the offer, and it forms part of the down payment when your offer is accepted.

When buying a hire, you should not skip a home inspection. It will give you heads up on problems such as weak foundations, wiring or plumbing defects. Hiring a home inspector costs you money but it will give you valuable information to use during negotiations.

Before taking out a mortgage to finance your home buying process, you should have these additional costs in mind. You can do your research and get homes that are within your budget so that you can be in a position to cover for any other cost that may catch you unprepared.