Purchasing a home could be one of the biggest moments in your life, and that is why you must be prepared for any costs that you might run into. Well before you make an offer on your new home, you should sit down and figure out exactly what expenses you will need to cover in the coming months.
Initial Down Payment
When it comes to purchasing a home, the down payment is usually the single biggest expense. In most cases, buyers should have a down payment of at least 20 percent, but that has changed in recent years. If you have excellent credit or work within a certain industry, then your down payment could be much lower. Many cities and states also offer incentives that will reduce your down payment requirements.
Closing Costs
To close on your home, there are a handful of fees that you will be required to pay. Some of the most common closing costs include application fees, professional inspections, appraisal fees, and comprehensive credit checks. Luckily, many buyers are able to wrap their closing costs into their home loans. While that tactic might cost you a little extra in the long run, it could help you get into the home of your dreams.
Taxes
Purchasing a home could help you qualify for some state and federal tax credits, but there are some other taxes that you will need to account for. In some states, a transfer tax must be paid before the title is transferred and the keys are handed over. You should also spend a little bit of time figuring out how much your annual property taxes are going to be.
Maintenance and Repairs
It is an unfortunate fact that almost every homeowner will run into some major repairs over the years. There is also going to be quite a bit of ongoing maintenance, and that could cost you hundreds a month. To save on maintenance and repairs, you might want to contact local companies that offer service contracts. Many service and repair companies offer contracts that will cover major home appliances, plumbing, electrical work, and HVAC systems.
If you still aren’t sure what expenses you might run into as a homeowner, then you should consider scheduling a meeting with your loan officer or real estate agent. Those individuals should be able to give you a much better idea of exactly how much money you should have saved up before you make an offer on a home.
Author bio:
Meghan Belnap / Blogger, Researcher and Freelance Writer
Meghan Belnap is a freelance writer who enjoys spending time with her family. She loves being in the outdoors and exploring new opportunities whenever they arise. Meghan finds happiness in researching new topics that help to expand her horizons. You can often find her buried in a good book or out looking for an adventure. You can connect with her on Facebook right here and Twitter right here.
