7 Unexpected Expenses First-Time Home Buyers Face
When you buy a home for the first time, there are many things to pay for. While it will be an exciting time, you have to find the money to pay your down payment, closing costs, and more.
Even if you think you understand all the costs you’ll need to cover when buying a home, there could be unexpected expenses. You might think you have the money saved to pay for all of the costs, but you could find yourself with a nasty surprise just months into your ownership of the home.
Unexpected costs you could face in your first year owning the home include:
- Property taxes
- Homeowners insurance
- Utility bills
- HOA Fees
- Furniture and decor
Even though the appliances in your home might be working when you bought the property, something could go wrong soon after. This might mean having to find the money to pay for repairs or even buying new ones.
If you suddenly find that your kitchen stove isn’t heating your food it could be a costly repair. If it can’t be repaired, and you need to buy a replacement oven, a new one will cost you around $500-$1,000. You can also expect to pay between $100 and $200 for installation if you are unable to do it yourself.
On average, however, homeowners typically spend about $1,000 to $5,000 when replacing an appliance. Purchasing a home warranty after closing might be a way to avoid these potential expenses.
Your property taxes will pay for the fire department and roads in your area, as well as other amenities. This will often be added to your monthly mortgage payments by your lender so that you don’t have to worry about a large bill, and they don’t have to worry about you putting a lien on the title.
Property taxes are normally based on a percentage of the value of your home, so you should know how much will be due in advance. The amount you have to pay can be reassessed, however. And if this does happen to you, then chances are your property tax bill will increase.
Even without a reassessment of the value of your home, property tax normally increases each year anyway.When buying a home there are a lot of expenses. While most are expected there are several that are not and here are the top 7 unexpected expenses. #homebuying #realestate #firstimehomebuyers #tips #advice #howto #unexpectedexpenses
Your lender will require you to have homeowners insurance for them to approve your mortgage. This will make sure that there is coverage should your home need to be rebuilt or sufficient insurance to pay off the balance of the loan. It will likely also offer other protections like liability insurance.
This insurance might be paid in a similar way to property taxes, with your lender charging you each month and paying it into an escrow account. This should mean that the correct premium is ready to be paid from the escrow account when it is due.
However, home insurance premiums do increase. This often happens each year to cover the increased cost of repairing or replacing your property.
Home Utility Bills
If you have been previously living in an apartment, you might not have been responsible for the full cost of utilities. But once you own a home, these costs are yours entirely.
These utility costs can often be higher than first-time buyers expect. This is more likely if you’ve moved from a smaller rental property with less space to heat and cool. The average cost of home utilities is likely to be between $250 and $500 per month.
When you own a house for the first time, maintenance costs are something you can easily overlook. This means things like cleaning and maintaining the home inside and out. This will not only take more of your time than you might imagine, but it could also be more costly.
You might need to hire someone to help with the cleaning or landscaping, adding more costs that you won’t have planned for.When buying a home there are a lot of expenses. While most are expected there are several that are not and here are the top 7 unexpected expenses. #homebuying #realestate #firstimehomebuyers #tips #advice #howto #unexpectedexpenses
Homeowners Association Fees
If the home is within a development that has a homeowners association in place, they will have monthly fees to pay. These HOA fees could be as little as just a few hundred dollars every year or considerably more.
Average HOA fees for a single-family home are likely to be between $200 and $300 per month. This will cover the costs of maintenance and repair in communal areas of the development. While you should know how much your HOA fees will be before you buy the home, but there could be some unexpected expenses on top of this.
Though there should be room in the HOA fees to set aside money for unplanned repairs, this is sometimes not going to be enough. Also, if the HOA isn’t well managed, money might not be saved for these occasional expenses.
When some unplanned repairs are required, your HOA could ask for extra money from the homeowners. These are sometimes known as special assessments and could be a substantial extra amount of money you need to find.
Furniture and Decor
If you are moving into a larger property, you might need to purchase more furniture. If you need to buy a new sofa, this isn’t going to be cheap. You can expect to spend at least $1,000 to $2,000 if you need a new sofa.
You might also find you need to spend money on decorating the home. If you don’t like the previous owner’s taste in decor, or it doesn’t match very well with your furniture, this will be another thing you need to find the money for.
The cost of these hidden unexpected expenses can begin to mount up, but there are some things you can do to reduce these costs. You might be able to reduce your furniture costs by going to garage sales or checking websites like Facebook Marketplace or Craigslist.
With a little bit of work, it is also possible to renovate old pieces of furniture. Perhaps by sanding an old table, and then applying fresh lacquer, you can save on furniture costs.
Expect the Unexpected with unexpected expenses! There are more costs to owning a home than many first-time buyers expect. These costs are on top of finding a down payment, closing costs, and the other costs associated with buying a home.
But despite all this, buyers need to be ready for the potential hidden costs of owning a home. For this reason, they shouldn’t overstretch their finances when buying their first home. Though these costs will be more than they would have had to deal with in a rental, buying a house is a better long-term decision buyers just need to be prepared for the unexpected expenses.
Please consider spreading the word and sharing; 7 Unexpected Expenses First-Time Home Buyers FaceWhen buying a home there are a lot of expenses. While most are expected there are several that are not and here are the top 7 unexpected expenses. #homebuying #realestate #firstimehomebuyers #tips #advice #howto #unexpectedexpenses
About the Author
Top Wellington Realtor, Michelle Gibson, wrote: “7 Unexpected Expenses First-Time Home Buyers Face”
Michelle has been specializing in residential real estate since 2001 throughout Wellington Florida and the surrounding area. Whether you’re looking to buy, sell, or rent she will guide you through the entire real estate transaction. If you’re ready to put Michelle’s knowledge and expertise to work for you call or e-mail her today.
Areas of service include Wellington, Lake Worth, Royal Palm Beach, Boynton Beach, West Palm Beach, Loxahatchee, Greenacres, and more.