Purchasing a home?
We’re here to give you some pointers to help prepare for those unexpected costs that might pop up.
You’ve just bought a home and you can’t wait to move in! The home is perfect, charming neighborhood, nice neighbors. But the bills have only just begun. Be prepared for additional costs coming up that might make you quickly feel like you’re drowning in your new home.
Expect the unexpected
For almost every person who buys a home, the closing is just the beginning of the money spending process. Closing costs and down payments are planned for a saved accordingly, but the unexpected costs come after you move into your home.
When purchasing a home, definitely hire a home inspector (this costs money too!) to look over your new home. Inspectors can help give you an idea of how much money you might have to spend after move in, or you can try to negotiate these fixes into the contract before purchasing. Inspectors look for bad electrical wiring, weak foundations, wood rot and other hidden problems you may not find on your own. Most of these problems are small, but some can become large and costly if not caught early!
Almost all problems found by home inspectors are not covered by home insurance companies. Try to save yourself some money by working in the fixes to your home purchase agreement. After all, it can’t hurt to ask, and a lot of sellers will fix things to keep you from backing out of the contract.
Consider the creature comforts
Another cost is your own comfort. There are a number of smaller considerations you may not think about until after you move in.
If the home you are purchasing comes furnished- do you like the furniture? If not, you can spend a small fortune re-furnishing your new home. Used to having the highest speed internet and sports package cable? Hopefully your new home is already pre-wired for these, as adding them on after the home is built could become very costly.
And if you’re moving from the world of renting to the world of homeownership, you’ll probably be faced with bills you never had to pay before. A lot of HOAs will cover trash pickup, insurance, your water bill. All of these will now fall on you to pay and can add up quickly.
On top of that, now that the home is yours and something breaks? That cost is coming out of your pocket from now on. No more calling a landlord or agency to come and fix the problem for you.
The best way to prepare yourself for the unexpected is through planning. If you are looking at a fixer upper, research how much those improvements could cost. Call around to contractors to see how much they would charge you. You don’t want to assume that something is an easy fix only to find out later it will be much harder and therefore much more expensive to change.
There’s really no limit to how prepared you can make yourself. Look at insurance prices for your new home. Is it in a flood area? That could triple your insurance. Does the age of the home make it more expensive to cover? What in your home can you live with and what would need to be fixed immediately.
Know what your budget is and how much you are able to put as a down payment. If you find something at the top of your budget, that doesn’t leave you any money leftover if you need a new washer and dryer. Consider something on the lower end of your budget that you can slowly make your own as you save the money.
The last thing you want to do is buy a house that you think is perfect, only to find out that you can’t afford the bills and are now house poor, unable to have any pleasures in life.
Know your budget and plan ahead. Buying a home is a lot less scary when you know what you’re getting into.