First-Time Buyer: Planning for the Total Cost of Buying a House

If you are at the same time excited and terrified at the prospects of purchasing your first house, don’t worry, you are not the only one. This is probably the largest financial venture you will undertake so it is natural to be a bit nervous and to wish to research everything in detail so you can feel comfortable as much as possible. With that in mind, here is a list of certain expenses you need to keep in mind when you are planning the budget for your first home.

Prepare for the down payment

Everyone who has purchased a house, vehicle or other more expensive asset had to prepare for the down payment. It represents a portion of your new house’s price which is paid upfront and it can go up to 20 percent of that sum. For instance, if the house costs $200,000, the down payment would be $40,000 and if you saved up that amount, that means that you would have to acquire another $160,000 through a bank loan or some other financial scheme. Both your savings and the manner you would obtain the rest of the sum is something you need to plan for in advance to make sure you come up with the optimal solution when it comes to monthly installments and the length of the payment period. 

Keep in mind the house insurance

Taking out home and contents insurance is a small pre-purchase step which could mean a lot in case something happens. One of the most important features you should pay attention to is the 24/7 assistance, while others that could be of use include temporary accommodation in case the damage is substantial and counseling after a traumatic event. The insurance costs vary varies from property to property, and you can click here for home and contents insurance reviews to get more familiar with the conditions and choose the option which would suit you the most. Some things you need to ensure your new home and belongings against are fire, earthquake, storm, flood, and make sure you read the small print and to know exactly what is covered by the insurance.

Anticipate building inspection costs

Since you are buying a house for the first time, you probably don’t have much experience with assessing the offer and there is a reasonable fear among many people when they start looking for the first property that they might overpay for a place. This is why building inspection is a perfect manner to check the structural soundness so you don’t pay too much for a house that is essentially better to be knocked down and built again. These inspections usually cost up to $600 which is not a big amount, considering that it gives you peace of mind regarding a long-term investment that is much larger.

Don’t forget the moving expenses

In all the commotion regarding finding the perfect place and arranging the finances to purchase it, many people forget about moving. Since your belongings won’t magically appear in your new home, you need to take it very seriously, as well as the incurred expenses. Besides a lot of hard work related to decluttering, organizing items and cleaning the place, you will need packing supplies and a truck or a moving crew to transfer your things to the new place. Also, some people go for moving insurance, just to make sure they are safe if anything gets broken or damaged during a move, which is not impossible, having in mind the amount of (semi)fragile belongings that you might have. 

When you think you’ve found your dream house, before saying ‘I do’ to it, sit and think about all the expenses and plan your budget well so you can make sure that you having everything under control. That is the only manner you will be able to truly enjoy your new house and to consider it ‘home sweet home’.