The following is a guest post.
A new-to-you home costs a bunch up front for just the house and land, but you also shouldn’t overlook the other large expenses that will take a chunk up front. Here are some to keep in mind.
The Home Loan
Not all home loans are the same. You will need to get several quotes for your new home loan to insure that a lender can cover what you’d like to buy and make you a good deal on your interest rate and closing costs. You can visit the actual lender locations, call, or go online. If you do go online, you can find sites that will give you a handful of quotes from different companies. Sites like iselect in Australia are even country specific service to compare and find home loan product suits you best.
Whatever method you choose, remember to select a deal that you can afford long-term since most people end up keeping their home loans for 10-30 years.
Depending on your location, closing costs can be huge. You will have to take into account your down payment, bank fees, appraisal, prepaid interest for an incomplete month, and even a handful of different documentation fees. Between the lender, the seller, and the general transaction fees, you could be looking thousands and thousands of dollars. You can negotiate a few of these expenses to be lower, but it will still be a pretty big lump of cash.
Home Owner Association Dues
If you are buying in an area with deed restrictions and a home owner’s association (HOA), that annual fee will also have to be paid at closing. Then you’ll need to budget for it every year after too. These dues can be almost anything, but the average seems to be between $400 to $900 a year. The amount is determined by the specific HOA, so if you ever want to see it get cheaper, you will need to get involved.
Even after closing, remember to budget for your move. You may need actual movers, which can charge $20 an hour depending on the company, so shop around. You will also need to clean up your last place, take care of any little stuff in your new home before moving in, and keep in mind any appliances or furniture that you will need to provide since those can cost quite a bit too.
Overall, please remember to budget for all of these costs before jumping into a new home purchase so you won’t be unhappily surprised.