Buying a house is expensive, but unless you go in with an understanding of all the costs that are involved, you might be surprised by the various fees that you will need to factor into your budget from day one.
To arm you with the information you need to avoid this, here is a quick rundown of the various financial burdens you will have to shoulder when buying a new house.
The mortgage
This is the area with the most variables to take into account, and it is worth noting that the affordability of your mortgage is not just about the price of your property, but also factors in a whole host of other elements.
For example, mortgage rates will vary greatly depending on where you are buying your home, as outlined on this page, as well as how good your credit score is, how much you earn and how much of a down payment you are putting on the table.
Compare home loans to find mortgage deals which will have arrangement fees attached,, and if you use a mortgage broker you may also need to fork out for this service, although certain brokers will be able to recover costs from the lender, which is worth keeping in mind when you are shopping around.
The additional application fees
Even if you are approved for a mortgage as part of the process of buying a new home, there are a host of other fees associated with putting through the application and ultimately completing your purchase.
You may be expected to pay for the title search and also for any transfer tax, which could be applicable in your region.
Once again, it is worth noting that there is a huge amount of variation from lender to lender and from place to place when it comes to working out what additional application fees are levied against home buyers, so doing your research, reading the small print, and consulting local experts is a good idea.
The moving expenses
An often overlooked part of the cost of buying a home is actually moving your possessions into it, the price of which will vary depending on how much you need to move and how far you need to move it.
Also remember that putting items in storage may be an option, although this also comes with its own costs to bear.
Get quotes from different movers if you can so you have an idea of what a competitive price might be for your particular job.
The property tax obligations
Once you take ownership of your home, you will be liable for taxation by the local government, and in most cases this will come as part of your mortgage payments, meaning it is another monthly outgoing that has to be taken into account in your calculations.
Most property taxes are based on the assessed value of your house, not the amount you paid for it originally. This means they will creep upwards in time if its value rises as the market improves.
Insurance & maintenance fees
Last but not least, you should weigh up the expenses that come with keeping your home in a good condition and carrying out repairs due to wear and tear, accidental damage or other calamities.
Having homeowners insurance can give you the financial support you need if disaster strikes, and may be required by your mortgage lender. Likewise, it is said that you should spend at least 1 percent of the value of your house on maintaining it annually.
Overall it should be obvious that careful consideration and calculation of the fees of buying a home is important for everyone, regardless of your circumstances.
