When you’re shopping for a house, you’re likely already prepared for some of the higher costs involved. However, you might want to brace yourself – the listing price you’re seeing for the home is likely far less than what you’ll end up paying. What makes buying a home so expensive, even after you’ve already paid the price shown on the listing? Here are just a few of the hidden costs of buying a home you should be ready to budget for.
Home Insurance
Once you’ve paid for and moved into your home, you want to ensure that your investment is well-protected. Not only that, but you may be required to pay for this extra cost – many mortgages require the purchase of home insurance. While this is an additional fee that you’ll need to pay regularly, it’s a worthwhile investment. Consider it a form of surge protection for your entire home. This way, you, your family, and your belongings are secure in case of an unexpected emergency, like a fire, flood, or break-in.
Property Taxes
No matter what you pay for your home, your home will have taxes associated with its ownership. Usually, these are based on assessments of your home that determine a set value for the property based on location, size, age, and more. While these taxes are usually only a small percentage of what the home is worth, it’s still important to budget for so you don’t get caught unprepared. For most home listings, you’ll be able to gather information on property taxes before you buy; this way you’ll avoid making a purchase that you can’t actually afford.
Community Association Fees
Depending on what town and neighborhood you live in, you may also owe community association dues once you’re a homeowner. These community associations provide valuable resources and services but are still another cost to budget for. U.S. homeowners paid approximately $88 billion in assessments toward community associations in 2016, so it’s worth checking to see if you live in a neighborhood where you’ll be expected to pay these fees.
Buying a home is expensive, but with the right budgeting and awareness of hidden costs, you’ll be ready to settle into a home you love. Budget for these and other hidden fees before you commit to your 20% down payment.
