Buying the first house is among the most thrilling and exciting projects of a person’s life. And, yet, it also represents one of the most stressful and intimidating experiences – especially as some families strive towards this moment for all of their lives!
Nonetheless, 64% of Millennials report having regrets regarding the home they have bought, also because of associated and hidden costs they were not prepared for. So, if you have been thinking about investing in your first property, here’s a rundown of the costs you need to know about (and not underestimate!).
Maintenance and Renovations
Some renovations can be completed before or after the purchase of the house, but they come at a cost you need to be aware of.
Before closing the deal, you will have your future property professionally inspected, which will tell you all you need to know about the needed improvements. However, over time, you will also need to properly maintain your property and keep up with all the necessary repairs – and these can amount to 1-4% of your home’s total value!
The insurance policy you pick represents one of the most important associated costs to closing on a house deal. At the same time, without insurance, your property – and major investment – could be exposed to risks and threats.
Therefore, it is essential that you are aware of what to expect before committing to a purchase. If you do go ahead, make sure you have the right insurance policy for your needs and you have an insurance adjuster that can help you make the most of your claims.
When moving house, you might face significant moving costs. Naturally, these depend on where you move from and to, and how accessible the two destinations are. However, in most cases, you will need to hire a professional moving cost, at least to transport your furniture and heavier items. Make sure you have budgeted for this associated expense!
Utility and Taxes
Utility and taxes vary depending on the type of house you are investing in and what usage you make of the electrical, water, and gas systems. However, utilities and taxes are often ongoing costs that can heavily weigh on your finances if you are not conscious of what to expect. You can easily reduce the financial impact of bills and utilities by budgeting for them in advance.
Costs of Closing the Deal
There are also important costs associated with closing the purchase deal. And, these can be as high as 3 to 6% of the purchase price! Some of these associated costs include:
- Property inspection
- Lawyer fees
- Appraisal fees
- Surveyance fees
- Title cost
- Recording costs
- Document writing
- Application for mortgages and related costs
- Brokerage commission costs
You should always consult your mortgage broker and estate agency to better understand the specific costs associated with your unique house deal. Don’t be afraid to ask other homeowners for their experience!