July 4th, 2017 5:25 AM by Jackie A. Graves, President
You'll Need Cash Upfront,
Savings for Unexpected
not cheap to buy a home these days, and we're not just talking about the price
of the home itself.
out-of-pocket costs that crop up during the purchasing process, or even when
you're moving in, can put an unexpected strain on your already-hurting bank
starters, you'll need to budget between 2 percent and 5 percent of the home's
purchase price for closing costs, including appraiser, lender and title fees.
New regulations passed last year mean lenders have to be more transparent about
these fees, and (as long as you read your closing documents) you should have a
relatively good idea of what they'll be when your lender makes you an offer.
those closing costs only make up a portion of the added expenses you'll face.
half of homebuyers incurred more than $2,000 in unexpected charges during the
home buying process, according to a recent survey by TD Bank, and 10 percent
spent at least $5,000 more than they expected.
people just look at the sticker price of the house and the mortgage
payment," says Svenja Gudell, chief economist at the housing site Zillow.
"But there are a lot of additional costs that can shock first-time
you've made an offer on a property, you'll usually need to pay an inspector a
few hundred bucks to give the home a once-over. If he finds any potential
problems -- structural issues or asbestos, for example -- you may have to pay
another specialist to come in and offer a professional assessment.
it can be tempting to skip the inspection to save cash (or to make a more
attractive offer to a seller), it's worth the outlay to get peace of mind that
the home is in good condition -- or negotiating ammo to make sure the price
reflects the necessary repairs. "It's money well spent," says Cindy
Hamann, chair of the Houston Association of Realtors.
are also often surprised with the extra cash -- beyond closing costs -- that
they need to spend at the closing table. Many lenders require you to pay a
year's taxes and mortgage upfront. If the seller prepaid any taxes or
homeowners association dues, you'll have to pay her the prorated amount for the
rest of the year or quarter.
you're done with all the fees and the deposits for reserves, you may end up
bringing many more thousands of dollars than you thought to the closing,"
says Keith Gumbinger, vice president of HSH.com.
you've officially closed, you'll need to pay for the move itself. That cost
will vary considerably depending on where you live, how far you're moving, and
how much stuff you'll need to haul. In general, though, expect to pay at least
a few thousand dollars for professional movers.
easy to overpay for movers, so get quotes from a few companies and hire someone
who's licensed by the Federal Motor Carrier Safety Administration and has good
reviews online (even better if you can get a referral from a friend).
you may be able to put off renovations or furniture purchases, there are some
costs that new homeowners face right away. You'll likely want to hire a
locksmith to change the locks, for example, and there could be deposits or
setup fees for getting your utilities started.
a new homeowner, you'll also now be on the hook for both routine and unplanned
maintenance costs on the home. Experienced realtors say you should expect
something to break or need replacing within your first year.
up an emergency savings account with at least six months of expenses that you
can tap if your roof springs a leak or the heater suddenly stops working. That
way you won't have to turn to credit cards to cover the unexpected and you can
spend some time enjoying your experience as a new homeowner, rather than
worrying about how you're going to pay for it.
By: Beth Braverman - To
view the original article click here