Buying a home is the largest purchase most of us will make in our lifetimes. We’re often excited to shop around and find “our space” – yet at the same time, we are sobered by the process and costs. While we are all familiar with many of those costs, several of them often surprise the first-time homebuyer.
The average monthly cost of homeownership in the United States is $1,634. It costs quite a bit more than that for many. This is why it’s important to know what you’re getting into before you enter the housing market.
The prices on your favorite real estate site are probably already your greatest concern. But as you get closer to your budget cap, the smaller stuff that’s not listed on the front page becomes more integral. There are also traditional upkeep and maintenance expenses you should prepare for. You likely did not have to encounter them as a renter, thankfully. Put simply, all that stuff which used to be the landlord’s problem is now yours!
Closing Costs
You would think you’ll have paid enough for your new home, but there are significant fees associated with the process of obtaining it through the closing. Some of the more common closing costs include taxes and insurance escrow payments, legal fees, title insurance, and recording fees paid to the county clerks’ office. These costs alone can get up into the thousands.
Regular Home Upkeep
It is estimated that you’ll probably spend up to 1 percent of your home’s value on maintaining it every year. This most frequently includes lawn and yard maintenance, issues with roofing, gutters, or siding. Other expenses like driveway repaving, window replacement, HVAC upkeep contribute. Plus, more miscellaneous costs you encounter as you keep your home in livable condition.
Homeowners Insurance
Homeowners insurance is required when you take out a mortgage to purchase a home. Policies vary with location and housing details. The wisest among us will spend a little extra to assure all assets are covered in the event of a catastrophe. As with most types of insurance, shopping around for the right company or agent can make a difference in what you’ll wind up paying.
Property Taxes
Property taxes are another pesky cost you probably didn’t deal with as a renter (at least not directly). These taxes are assessed yearly. They vary from county to county, or even town to town depending how your areas municipalities function. While it may be of little comfort, you can appeal a property tax assessment to potentially lower your tax costs. If you’re interested in doing this, you should consult an attorney.
The plethora of costs associated with purchasing a home does not mean you shouldn’t do it. It’s merely an important consideration in how you budget and proceed with the home purchase process. If you’re seeking to buy a home in the greater Detroit Lakes, MN area, please contact Action Realty of Detroit Lakes today. One of our highly experienced agents will help you understand all the costs associated with buying a home and ensure you find the best for your budget!