Expenses You Can Expect to Pay for When Purchasing a Home or Condo
Are you in the market for a new home but do not know how much money you will need for additional expenses? Well like most, this whole process might make you feel overwhelmed, but if you have everything planned out and budgeted for, you should be just fine. Here are all the expenses you can expect to pay for when buying a home or condo.
Down Payment: First, your largest upfront cost will be your down payment. The typical down payment ranges from 3% to 20% of the purchase price depending on the type of mortgage you qualify for and your financial situation.
Closing Cost: These usually include various fees associated with finalizing the transaction. Closing cost typically range from 2% to 5% of the home’s purchase price and may include fees for loan origination, appraisal, title insurance, attorney fees, and more.
Home Inspection: This is one of the more crucial expenses because you are paying to make sure the property is sound and to determine the fair market value of the home. The fees usually range from a few hundred to a thousand dollars.
Property Taxes: Property taxes are directly linked to your home’s value and where you live. These are usually paid annually or semi-annually.
Homeowners Insurance: You pay for Homeowners Insurance to protect the investment in case of loss or damage. The price depends on a couple factors such as location, property value, and coverage options.
Private Mortgage Insurance (PMI): If your down payment is less than 20% of the purchase price, you may be required to pay PMI. This ultimately depends on your down payment and credit score.
Homeowners Association Fees (HOA): If you are moving to a condo or planned community, you may have to pay HOA fees. These cover maintenance of amenities and can vary from place to place.
Utilities and Maintenance: Once you own the property, you will be responsible to pay for things such as water, electricity, and gas along with any other maintenance repairs and upkeep.
Moving Costs: You have to move your stuff somehow. Unless you own a large truck or van, you will have to factor in hiring a moving company. On top of that, boxes and supplies to make sure everything gets to the new house in one piece.
It is essential to budget for these added expenses in order to be financially ready for homeownership. If you are in the process of looking for a new home, reach out to us today and we can connect you with a seasoned agent who can lead you in the right direction.
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