Buying a new home? One of the biggest mistakes new buyers make is forgetting to factor additional expenses into their budget, and quickly become overwhelmed by their rapidly dwindling bank account. Prepare yourself ahead of time for the expenses you will have to face as a new homeowner, and you can make sure you will avoid any nasty surprises. In addition to the down payment on your new home, make sure you have enough to cover these expenses as well.
- Closing fees – these include legal fees, property tax, welcome tax, and utility adjustment costs.
- Home inspection – you will want to ensure that your future home has been inspected by a professional before you make that final commitment.
- Mortgage life insurance – Some mortgage lenders make this life insurance mandatory, others leave it open as an option. But it is an option worth considering as a security measure, should anything happen to you or your spouse and you miss one or more mortgage payments.
- Home Owners Insurance – this is one of the first purchases you will need to consider.
- Moving expenses – Don’t forget to factor in the cost of hiring movers and/or renting a moving truck. If you will be moving a fair distance from where you currently reside, you may also have to calculate gas and meal expenses.
- Immediate new owner expenses – As soon as you take possession of your new home, you will want to change all the locks and the alarm configurations. You’ll also want to clean the house from top to bottom, so you may choose to restock your inventory of cleaning tools and products.
- Renovations – Most of the immediate renovations will be cosmetic in nature – you’ll want to sand those horrible stucco walls, pull out the outdated pink carpet and rip out those old bathroom tiles – but it might be smarter to take a closer look at any structural renovations which might be hidden but need to be done sooner.
Plan for these expenses ahead of time, and you’ll avoid a lot of financial stress once you’re ready to pay a monthly mortgage fee.