Don’t Forget These Costs When You Buy Your First Home
The excitement of finding your first home is something that you need to experience to understand it. However, if you find yourself researching the real estate market for the perfect home sweet home at the moment, if you haven’t yet committed to a house, it’s still time to consider these costs below in your calculations. Indeed, becoming a homeowner is an expensive business, and it’s something that you need to be aware of. Like with most dilemmas, knowing is half the battle.
#1. The Mortgage
It is likely that you will need a first time home buyer loan when you commit to purchase. Indeed, without a mortgage, it can be tricky to buy your first home. The mortgage is a loan that can offer you a long period of repayment; some go well beyond twenty years. The main issue that first-time homeowners experience is to be able to find out what they can afford in terms of repayment. To put it in other words, if you rely on a loan to repay your first loan, then you’ve probably done something wrong! But the errors of inexperience can only be avoided with a thorough research and detailed calculations.
#2. Cost Of Renovation And Improvement Work
If the house you buy needs renovation works, it is something that is generally reflected in the price of the house. Consequently, it is also something that you should take into account when you are looking for a first-time buyer loan. Indeed, you need to add the estimated costs of the renovation too! Additionally, most homeowners invest time and money in aesthetic remodeling projects. In average remodeling and improvement projects costs vary from $5,000 or lower up to $130,000. It’s not the kind of investment that you don’t want to take into account!
#3. The Energy Bills
With plenty of advice online on how to save on your energy bills, it may seem irrelevant to take these costs into account. However, you will need to consider the quality of the insulation in the walls, under the roof and at the windows and doors. A house loses 10% heat in winter – or cool in summer – through windows that let the air through, against over 30% through a poorly insulated attic. When you buy a home, it’s best to discuss with the current owners the cost of their energy bills, so that you can prepare yourself.
#4. Maintenance Costs
Nobody knows how much maintenance costs should be. There is a popular rule of the thumb that says that your maintenance costs should be 1% of the price of the house. For example, if you bought a $300,000-worth home, then you shouldn’t budget more than $3,000 a year for the maintenance. However, this estimation works as an average over a long time period and can be followed as a golden rule. Always consider the age and the condition of the house, the weather in the area, and the location – whether you are isolated or in town: These will give you keys to calculate your maintenance budget.
#5. Cost Of Living
Often forgotten in the calculations, the cost of living relates to how much you would need to spend to go to work, do your grocery shopping and keep healthy in your house. Additionally, entertainment costs are also an important factor in your everyday life. As some areas can be more expensive than others, it is an important taste of reality.