Buying a house is one of the biggest investments you’ll ever make, and it’s easy to get caught up in the excitement of finding your dream home. However, before you sign on the dotted line, it’s important to remember that there are many costs associated with homeownership beyond just the mortgage payment.
In this blog post, I’ll explore five costs that are often overlooked by first-time homebuyers. By understanding these expenses ahead of time, you can avoid any unexpected financial surprises and make a more informed decision about whether homeownership is right for you.
1. Property Survey
A property survey is an important investment that can provide peace of mind and protect your investment in the long run. If you are not purchasing a newly built house or an apartment, then carrying out a property survey on the building is highly advisable.
A professional property surveyor company such as AdvantageNC will carry out a comprehensive check of the property for foundation issues, or water damage and also check the roof for any potential issues. Inside the house, the checks also include plumbing, electrics and septic or wastage system and you have optional ad ons, such as checking for mold, termite damage or water quality.
A property survey is not a valuation, but if the property is unsafe and needs work, it can give you a potential ground for asking to lower the property purchase price.
You might also need a property survey for your insurance company as many want to know that there are no hidden issues with the property they are insuring.
2. Home Insurance
Home insurance policies should begin on the day that you exchange contracts. Finding the best home insurance policy for you will require time and research, so you should consider using a reputable comparison site to do the work for you. To get started, all you need to do is fill in one short form and they will display multiple cheap quotes from all insurance providers.
3. Bring up-to date your Previous Bills
Whether you owned or rented your previous home, it will be your responsibility to pay off any unpaid bills that you may have at that property. This is something that is often overlooked, as many property buyers will focus on their new home and responsibilities. You will also need to set up your bills at your new address and pay for any administration fees you may incur when changing your details on policies.
4. Removal & furniture moving cost
Moving all of your belongings to your new home can be expensive, so you will need to take removal fees into consideration when you have bought a home. To save you money, you could hire a van and rely on your family and friends for help, but a removal company can save you stress and guarantee safety. If you are not ready to move some items, then you will need to calculate the cost of storage.
Here are my favourite ways to save on moving costs when you’re moving to a new house:
- Declutter before you move: The more items you have to move, the more expensive your move will be. Take the time to sort through your belongings and get rid of anything that you no longer need or want. You can sell items online, donate them to charity, or give them away to friends and family.
- Compare moving companies: Get quotes from several different moving companies to find the best price. Be sure to read reviews and check the company’s credentials before you hire them.
- Move during the off-season: Moving during the summer months or on weekends can be more expensive than moving during the off-season or on weekdays. Consider moving in the fall or winter to save money.
- Pack your own belongings: Packing your own belongings can save you money on packing and labor costs. You can purchase packing supplies online or from a local store.
- Use free packing materials: Instead of buying new packing materials, use items you already have, such as towels, blankets, and clothing, to wrap fragile items.
- Rent a truck: If you’re moving locally, consider renting a moving truck instead of hiring a full-service moving company. You can save money by doing the packing and loading yourself.
- Get creative with transportation: If you’re moving a short distance, consider using a bicycle or a trailer to transport your belongings. This can be a fun and eco-friendly way to move.
5. Property purchasing tax cost
One of the main extra costs that new homeowners forget about is the tax that has to be paid on each purchased property.
One of the main taxes is the property transfer tax, which is a tax on the transfer of real estate ownership from the seller to the buyer. The amount of this tax varies by state and can range from a small percentage of the purchase price to a flat fee.
You may be also required to pay closing costs, which can include fees for title searches, appraisals, and other services.
You also need to consider any property taxes, as these are assessed annually on the value of the property and are typically paid by the homeowner. The good thing is that, the property taxes are deductible on your federal income taxes, up to a limit of $10,000 if you’re married and filing jointly, or $5,000 if you’re single or married and filing separately.
Stay in touch
Hope this post inspires you and of course, I’d love to know what you think! Let me know in the comments below or find me on Instagram, Facebook or Twitter and add the hashtag #practicalfrugality so that I can see your post.
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Magdalena
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