In honor of finding (and making an offer on) my house one year ago, I wanted to share an inside look at what the home buying process looks like, because buying a house is no joke! You know you’ll be draining your bank account quite a bit, but do you know exactly what kinds of things you’ll need to shell money out for? Let’s take a look at the hidden costs of buying a house!
Ok so this first one isn’t really hidden, but it’s still something that should be taken into consideration. The down payment amount depends on the cost of the home you’re purchasing and the loan type you choose. Great news for first-time homebuyers though – you can purchase your first house with as little as 3% (of the purchase price) down!
This is the most important money you’ll spend pre-home purchase! While it’s technically optional, it’s definitely something you should do. Once you’ve made an offer on a house and its been accepted (yay!), you want to make sure that everything is as it appears and that there aren’t any big hidden issues that will come back to haunt you post-purchase. A home inspector checks every nook and cranny in the house both inside and out, including the roof!
The home inspection will run you about $300 (on average). There will always be a list of things that “need fixing,” but most of them should be minor. If there are larger concerns, the inspector will raise and discuss them with you so you can decide if you still want to proceed with buying.
Also in this category? A pest inspection! It’s worth having someone come out to scope out your property to see if there are any termites, rotting wood, etc.! Those are definitely things you don’t want to have to deal with!
With my house, there was a patch of stucco (what the house is made of) that needed to be replaced and a couple other things that the inspector recommended get checked out further (think of inspectors as generalists – for specific issues you need to hire a specialist). Since a house is an incredibly big investment, I opted to pay for an electrician and plumber to come out and diagnose, and everything turned out to be ok. Had it not, I would’ve needed to rethink the purchase.
Closing costs are going to be where the bulk of your money (a few thousand dollars at least) is spent. There are literally a million things rolled into this! The biggest piece is your down payment (mentioned above), but you’ll also be responsible for the behind-the-scenes stuff, like your application, appraisal, credit report, closing, homeowners insurance, title, and underwriting fees…. to name a few. Just a liiiiiiiitle intimidating. The good news is, there are no surprises! You’ll receive an estimate early in the process of what it’ll be and if you’re lucky (like I was), it’ll be significantly less when you receive the final cost a few days before closing.
While the bulk of your costs are going to be related to buying your house, you can’t forget about the costs of moving all of your things from your current apartment/house. If you’re moving from a 1-2 bedroom place in the same town, you can count on paying about $400 (at least)! If you’re moving out of state or a farther distance, the cost will be much higher.
Maintenance + Repair Costs
Does the house you’re purchasing need some work done? If it’s a fixer-upper, you already know you’ll need to invest a little extra, but sometimes other things pop up too. I knew I had a stucco repair done to a part of the house. Fortunately the sellers agreed to pay for the repair in the closing costs (meaning I had to pay less the day at closing), but nonetheless, it was still an expense I knew I’d need to take care of fairly soon after moving in. Not to mention researching companies to come do the repair!
Another thing to keep in mind? Maintenance costs! These can be ongoing (optional services like lawn care, pest control) or one-time services (assembly, installation), but nonetheless still add up as time goes on!
Are you a homeowner? Thinking about buying? I’d love to hear your thoughts on the hidden costs of buying a house!