Buying your first home is truly a milestone, but there are a few hidden costs all new prospective homeowners need to consider so they can be well prepared before making a big decision.
- Up-Front Costs
Aside from the down payment, first-time buyers should also factor in closing costs, which include broker and appraisal fees, escrow costs, legal fees, application processing fees, and more. Closing costs differ from state to state, but they typically run around 2 percent of the purchase price here in Florida. Real estate agents can help navigate the paperwork and break down the expenses, but buyers should be aware of what they’ll be responsible for up front.
- Monthly Bills
If they were previously renting, new homeowners should consider that their monthly budgets might need to expand. On top of a mortgage payment, they often incur more expensive utility bills and insurance, as well as property taxes. And buying into a community or condo building usually involves paying a monthly homeowners association (HOA) fee, which could change from year to year.
- New Appliances
Former renters, who are used to inheriting all the necessities, including a refrigerator, microwave, washer, and dryer, may be in for a surprise when they buy a home and realize that the previous owners won’t be leaving those appliances behind. Before you close, make sure you have what you’ll need and are prepared to purchase whatever items have to be replaced.
- Home Inspection
The amount you’ll shell out for a pre-closing home inspection often depends on the type and age of the home. A brand new condo or townhome usually runs no more than $300, but a single-family house could cost twice that amount. However, this is one expense you won’t want to skip out on — otherwise you could unknowingly purchase a property that’s in need of costly repairs.
Home Renovation
Maybe you got a great deal on a fixer-upper. Or you want to make some cosmetic changes to suit your style. Either way, be realistic about how much home renovation will cost in the long run. Remodeling an entire home costs Floridians an average of nearly $43,000, according to data from HomeAdvisor.com. Of course, you may have smaller projects in mind such as knocking down a wall or building a walk-in closet. Either way, make sure you’re clear on how much it will cost to get your new home exactly the way you want it.