4 Sneaky Expenses That Are Often Overlooked When Buying a HomeAugust 6, 2020 8:00 am Alex Noga
Summertime is notorious for fun in the sun, but with mortgage rates currently at a historic low, maybe you should consider hunting for “for sale” signs instead of your next bathing suit. Whether you’re a first-time homebuyer or looking to upgrade or downsize, now is a great time to consider buying a home. It can help establish equity and create financial security. But can you afford it? One of the biggest mistakes potential homebuyers make is that they ignore the true costs of buying a home. Yes, you’ve been pre-approved for a certain amount, but does that mean you can afford your mortgage on top of the other hidden costs associated with owning a home? Here are four sneaky expenses that are often forgotten about that can impact your dream of homeownership:
1. Closing Costs. While some buyers get lucky enough to have the sellers pay closing costs, most of the time buyers have to pay a couple thousand dollars to close the deal. Closing costs are easily overlooked but include fees like mortgage taxes, attorney’s fees, title insurance, appraisal fees, etcetera, and are usually 2-5% of the home’s purchase price. Whatever you do, don’t forget about the closing costs!
2. Property Taxes. Does anyone like paying taxes? When it comes to buying a home, thinking about property taxes is probably the last thing on your mind. However, it is important that you research the property tax value on the home you’re interested in or on other homes in the area before you make an offer. While you might be able to afford a mortgage on a $250,000 home, you want to be sure you can you pay the yearly property taxes that go along with it too.
3. Insurance and Utilities. Just like a car, a home needs insurance as well. As soon as you go into contract on a house, contact your insurance agency or shop for home owner insurance policies that get you the best bang for your buck. Consider if your home is in an area prone to flooding, storms, or tornadoes, as this could drive up your premiums. You also need to think about the utility bills that come with owning a home. It’s going to be significantly higher than what you paid while living in an apartment, so consider asking the former homeowner what they paid in utilities so you can set a budget.
4. Moving Costs. It’s so exciting to buy a home, but how are you going to get all your belongings from your apartment or previous home to your new place? Depending on how much you have to move and the distance to your new home, this one-time moving cost can be pretty steep. Think about shopping around for moving trucks or vans, or asking your friends for help to get you moved at a cheaper rate.
Whether you’re ready to make the move now or later, Telhio Credit Union offers a variety of home loans that fit your needs, keeping you financially stable while you achieve your goal of owning a home. For more information visit telhio.org.
This is a mutli-part sponsored series presented with paid support by Telhio Credit Union.
Telhio Credit Union is open to anyone who lives, works, worships or goes to school in Franklin, Fairfield, Delaware, Licking, Madison, Pickaway, Union, Hamilton, Warren, Butler and Preble counties. Founded in 1934, originally as the credit union for the Columbus Telephone Co., Telhio is a not-for-profit financial cooperative where its members are also its owners. Driven by its philosophy that members come first, Telhio is committed to the highest standards of responsibility and conduct. Telhio offers a variety of innovative programs, services and products to support its members’ financial needs. Telhio offers 9 branching offices throughout Central and Southwestern Ohio and nearly 4,000 shared branching locations nationwide. Federally insured by NCUA. Equal Housing Lender. NMLS #251831