The Commonwealth Blog

Monday, October 1, 2018

First-Time Home Buyers: What to Look Out For

Buying your first house is an exciting and dramatic life change. The thrilling independence of being a homeowner makes the house and neighborhood seem that much more perfect. However, the price might be something you sacrificed in fulfilling your dreams of buying the perfect house. Follow this guide to find out the best way to avoid overpaying and the unexpected fees that come with being a first-time home buyer.


More Than Just Mortgage

When you feel financially responsible enough to purchase a house, you have a good idea of what you can afford for your monthly mortgage. This price has probably affected your home search and helped lead you to a place within your budget. However, when buying a first home there’re many extra costs besides just being able to afford the mortgage.

Some of the most common fees associated with buying a home for the first time might seem disclosed as most are part of the home buying process. Closing costs, homeowner’s insurance, and appraisal fees are the most common. However, plan and expect the unexpected. Don’t spend your whole life savings on the down payment, as you’ll most likely need extra funds for unexpected expenses that are sure to arise.


Extra Expenses

You’ll want to plan for extra expenses to help to make your transition to a homeowner as smooth as possible. Be sure to hire a home inspector beforehand to make sure your house is in as good as condition as it appears from the outside. Home inspectors obviously cost extra money too, but it’s worth it to know that your house will survive the winter weather beforehand.  They will help you look at the structural quality of the house, electrical wiring, the foundation and other key elements you’ll want to know before moving in. 

Expect bigger costs for utilities such as electric, water, and gas. What you had budgeted for utilities when renting a place is usually considerably less than what they will be when owning the whole home. Other costs that come with being a first-time home buyer are property insurance, property taxes, association or neighborhood dues, and maintenance costs. The upkeep of owning the whole house and the repairs that come with it is a lot costlier than the life of a renter. You can’t call the landlord when the toilet breaks or there’s a leak, you must hire and pay for repairs yourself. This can be costly, especially if buying an older house in need of improvements. Consider this before buying so you aren’t in too deep when you don’t have enough to pay the electrician.

When buying a home for the first time, don’t be blinded by happiness and forget to plan for extra costs and expenses. Don’t blow through all of your savings on only the down payment. While the down payment will likely take a large chunk of your cash, make sure you have extra savings set aside to cover the costs associated with buying a home. Plan ahead to make sure you have enough for your mortgage, the increased cost of utilities and other homeowner expenses. Talk to the experts, and find a realtor you can trust to make sure you’re paying the right price. Ask questions, save extra, and expect the unexpected when purchasing your first home. The more you have saved up, the easier the transition and move to being an independent homeowner will be. 


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