by JoAnn Sabas
Over the past few years, you’ve saved up enough money to make a down payment on a piece of real estate. You’ve prequalified for a mortgage and you’re confident that you can make your monthly payments without any problem—but that doesn’t necessarily mean you’re ready to buy.
When purchasing a home, it is important to understand that your mortgage payment is only the first in a long list of new expenses. A failure to account for hidden costs may leave you in a difficult financial position down the road. So before you take the next step, take some time to assess the additional expenses for which you may soon become accountable.
Here are a few examples to help get you started.
Inspections: Before you purchase a piece of property, be sure to solicit the services of a home inspector. A qualified, experienced inspector will be able to diagnose a range of problematic conditions that will help you in several ways. You can use these findings to back out of a sale and renegotiate your offer. Inspections will generally cost around $500 or more, however, so while you might save in the long run, you must be prepared to absorb the immediate expense.
Appliances: Just because the sellers have a beautiful washer/dryer set, it doesn’t necessarily mean that you’ll inherit it when you purchase the home. Be sure to have a checklist for all the household items you expect to have, and figure out which items the sellers intend to leave behind. Oftentimes, sellers are willing to negotiate and may include items with the purchase, helping you to avoid having to buy all new appliances in the process.
Association Fees: If you’re buying a condominium, townhouse or apartment, it is likely that the real estate will be less expensive than a single family house. As such, your monthly mortgage payments will probably be lower too. However, many of these properties are part of an association which will require additional monthly payments to cover maintenance and improvements for common items like paving, plowing or additional benefits. In some cases, association fees can be even higher than mortgage payments themselves.
Closing costs: Once you’ve received the title for your new piece of property, you’ll need to pay fees to your realtor and the lawyer responsible for handling your closing. Closing costs can be incurred by the buyer or seller, though, so they can be used during your negotiations. But you’d be well advised to play it safe and make sure you have the funds necessary to cover closing costs.
It is easy to let emotions get the best of you during the house hunting process. If you find a home you love and it’s within your price range, you may be tempted to act quickly. But some homes are hiding their true expense, so it is vital that you account for all possible costs before making a decision. To learn more about finding the right home for your lifestyle, call or stop by to speak with one of our Mortgage Specialists today!