A home is one of the largest investments a person can make. Aside from the mortgage, there are many hidden fees that come along with owning a home that many buyers may not be aware of. Being prepared for these hidden costs and being properly educated on the buying process can lead to successful homeownership.
During the Sale
The down payment usually accounts for a majority of the costs that occur during the purchase of a home, but there are other fees that are also necessary to complete a sale. These may include:
- Inspection fees: A home inspection is highly recommended when buying a home. Aside from a regular home inspection, there may also be a lead-based paint inspection, pest inspection, radon testing, or environmental testing which checks for mold and other toxins.
- Application fees: This often covers the fee for the lender to process the application in addition to any appraisal or credit check fees.
- Closing costs: In addition to the down payment, there are other fees that may be due at closing, such as: attorney fees, courier fees, property taxes, private mortgage insurance(PMI), homeowners’ insurance, origination fees, prepaid interest, recording fees, survey fees, title search fees, transfer taxes, and underwriting fees.
After the Sale
Aside from the monthly mortgage payment, which may include property taxes and private mortgage insurance, there are other costs that are often due throughout the year, such as:
- Utilities: water, gas, electric, garbage, cable, Internet, and telephone services.
- Maintenance: lawn care, snow removal, gutter cleaning, and furnace cleanings are just a few examples.
- Repairs and renovations: indoor or outdoor painting, driveway resurfacing, interior and exterior updates such as new windows, roof, siding, bathrooms, kitchen, central air, etc.
After living in a home for awhile, the owner may want to make some updates such as adding on a new deck, refinishing the basement, or putting in a pool. Depending on where the home is located, there may also be homeowners’ association fees (HOA) which cover things like snow removal, lawn care and landscaping, garbage removal, pest control, and interior or exterior maintenance.