Buying a home can be an overwhelming process, especially when there are so many different costs and fees to consider. There are closing costs, down payments, and ongoing expenses that can make buying a home seem like it comes with an exorbitant price tag.
Sometimes not all hidden home buying costs are communicated before you move forward with the home-buying process. These are things that you may not even know are associated with the purchase of a home.
Don’t worry, you’ve come to the right place. Today we want to share the hidden home-buying costs that you need to beware of before going down the homeownership path.
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Home Buying Costs: The Things They Don’t Tell You
Here are some hidden costs to be aware of when buying a home:
Mortgage Insurance
Mortgage insurance is a type of insurance that is required by most lenders to protect them in case you default on your loan. Mortgage insurance is usually a percentage of your loan amount and is added to your monthly mortgage payment. It is important to be aware of this cost when you are budgeting for your new home.
Mortgage insurance is typically rolled into your monthly mortgage payment. Check www.ibuysd.com to learn more about hidden homebuying costs like this.
Homeowners Insurance
Homeowners insurance protects your home and belongings in the event of a covered loss, like fire or theft. But, there are hidden costs of homeowners insurance that you may not be aware of.
For example, if you have to claim on your policy, you will likely be required to pay a deductible. Deductibles can range anywhere from $500 to $5,000 or more. You will also be responsible for any repairs or replacement costs that exceed your policy limits.
Property Taxes
Many people are unaware of the additional costs associated with owning a home, such as property taxes. While the tax may seem like a minor expense, it can add up over time.
Property taxes are levied by the government and are typically paid through your mortgage lender. The amount of property tax you will pay depends on the value of your home and the tax rate in your area.
Home Owners Association Fees
A Homeowners Association Fee (HOA Fee) is a monthly fee that is paid to the association that manages the property. The HOA Fee covers the cost of things like maintaining the common areas, landscaping, and sometimes even the utilities.
While the HOA Fee may seem like a small expense, it can add up over time. For example, if you’re paying $100 per month in HOA Fees, that’s $1,200 per year. And, if you’re in an association with a large number of members, the HOA Fee could be even higher.
Maintenance & Upkeep Cost
Depending on the age and condition of the home, you may be responsible for a variety of maintenance tasks, from painting and repairing to landscaping and snow removal. These costs can add up over time, so it’s important to be aware of them when making your purchase.
Don’t Be Caught off Guard!
There are a lot of potential hidden home buying costs, so buyers need to be aware of them. Some of the costs can be mitigated with good planning and negotiation, but others are unavoidable. The best way to avoid getting blindsided by these costs is to work with a knowledgeable and experienced real estate agent.
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