5 Hidden Costs of Buying a Home

Published on 9/24/2021

5 Hidden Costs of Buying a Home

Deciding to buy a home, whether for the first time or 5th time, is a huge undertaking. It can be overwhelming to say the least to save for a down payment. Not to mention the time and energy to go through all the steps from getting pre-approved for a mortgage to the day you close. But what about the other costs associated with owning and buying a home? We compiled this list of 5 hidden costs to be on the lookout for to help prevent you from blowing through your budget. 

1. Closing Costs, Appraisals, and other fees

There are costs associated with simply getting a mortgage. One such cost is the appraisal fee. You’ll want to budget for this extra cost as well as for the closing costs on a home. Closing costs can range from 3%-5% of the purchase price. 

2. Home inspection

You’ll definitely want to get the home inspected before going through with the sale. When making such a huge purchase, you want to cover your bases and ensure there aren’t any major skeletons in the closets. Getting the home inspected, while an extra cost, will prevent you from moving in only to find there’s damage to the roof or a mold problem. Big hidden issues like that can cost you thousands of dollars if you’re not prepared.

3. Association fees

Many homes and condos these days belong to either a homeowner’s association or a condo association. You’ll want to find out before hand if the property belongs to either. These costs could pile up if you aren’t aware the home is part of one such association. Do the research now to determine how much those monthly fees will be so you can add that into your budget. 

4. Normal maintenance and repairs

Becoming a homeowner is such an exciting step as you get to take ownership over this space in ways renting doesn’t allow. Figure in the normal, routine maintenance it takes to keep your home in good working order. And remember that things do naturally go wrong or break down over time so set aside savings for those emergencies. 

5. Moving costs and settling in

Obviously moving is a big cost in and of itself when purchasing a home. Whether you hire movers or do it yourselves, it can get expensive. Plan for the costs associated with moving such as a truck rental, packing supplies and storage costs if needed. Once you start settling into your new home and unpacking, you’ll also come across minor adjustments, maintenance and upgrades you may want to tackle on the home right away. Perhaps this is only new hardware in the kitchen and fresh drapery. Or maybe it’s more intensive like a fresh coat of paint throughout and installing new light fixtures. The point is there will most likely be some improvements you want to make right off the bat so plan to set aside some cash for those aspects as well. 

Keeping in mind these 5 hidden costs associated with homeownership will set you up for success in creating and managing your budget.