The costs associated with homeownership you may not have considered.
There are more costs associated with owning a home than the monthly payment. Just when buying the home, you’ll have to pay for closing costs, the down payment, earnest money, title insurance, inspections, appraisals, the recording of the deed, etc. You need your real estate agent to lay out those costs for you ahead of time. Then after you own the house, there are five main things you should remember to budget for:
1. Furniture. Many people buy a house and then realize they need to buy furniture, which can cost thousands of dollars depending on what you’re getting.
2. Ongoing maintenance. Things are going to go wrong with your new house, and you no longer have a landlord to repair it. It’s a good idea to set a little money aside each month so you have it when things need to be fixed.
3. Home warranty. Consider purchasing a home warranty or having the seller purchase it for you (though having the seller pay isn’t as common in this strong seller’s market). For about $450 to $550, you can cover some of the major things in your house, at least for your first year of ownership.
Things are going to go wrong with your new house.
4. Taxes and insurance. Your lender will require you to insure the property, and if you don’t pay your taxes, the government will take your house away from you at some point.
5. Utility bills. These include things such as heat, electricity, water, sewer, etc. You can search an address online to see what a property’s high, low, and average bills have been for the past year. To search locally, visit the Madison Gas and Electric or Alliant Energy websites.
If you have questions about these hidden costs or any other real estate matter, don’t hesitate to give us a call or send an email. If you’re a first-time buyer, we’d love to help educate you about the entire process.