Buying a home is a significant financial investment, and the purchase price is just one part of the overall cost. To avoid unexpected expenses, it’s important to budget for additional costs that come with homeownership.
Here’s a breakdown of the hidden costs you should plan for when buying a home.
1. Closing Costs
Closing costs typically range from 2% to 5% of the home’s purchase price and include:
Loan origination fees
Appraisal fees
Title insurance
Attorney fees
Property taxes and prepaid interest
2. Home Inspections and Appraisals
Before finalizing a purchase, buyers should account for:
Home inspection ($300-$600)
Pest inspection ($100-$300)
Appraisal ($500-$700)
3. Property Taxes and Homeowners Insurance
Annual property taxes vary by location but typically range from 0.5% to 2% of the home’s value. Homeowners insurance is also required by lenders and costs approximately $1,000-$2,500 per year, depending on coverage and location.
4. Private Mortgage Insurance (PMI)
If your down payment is less than 20%, expect to pay PMI, which can add 0.5% to 1% of the loan amount annually.
5. Moving Costs
Moving expenses vary but can include:
Professional movers ($1,000-$5,000)
Truck rental and packing supplies
Utility deposits and activation fees
6. Home Maintenance and Repairs
Even new homes require ongoing maintenance. Common costs include:
HVAC servicing ($150-$300 per year)
Roof repairs ($500-$1,500 or more)
Lawn care and landscaping ($500-$2,000 annually)
7. HOA Fees
If you’re buying in a community with a homeowners association (HOA), expect monthly or annual fees that cover community maintenance and amenities.
Final Thoughts
Understanding these additional costs can help you budget effectively and prevent financial surprises. By planning ahead, you’ll be better prepared for the true cost of homeownership and enjoy your new home with confidence.
Scott Sweeney
Your NorCal Realtor
M&M Real Estate
BRE Lic# 01938720
Cell: Call/Text 707-330-2324
About Scott Sweeney
SweeneySells
Full Time Realtor 13 Years +
Over 100 Families Served
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CSUS Business & Marketing Graduate 2006
With quickly serving over a 100 families, Scott Sweeney has become a top 5% producing Realtor in the greater Sacramento area who has helped clients from the Bay Area to South Lake Tahoe. Scott has a Bachelor Of Science in Business Administration, with a concentration in Marketing from CSUS. His education, and extensive background in the hospitality, marketing, and real estate industries, have helped Scott to become one of the leading, and most sought after agents in the area.
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