Home Buying 101: Five Hidden Costs of Buying a Home or Condo

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“If I were asked to name the chief benefit of the house, I should say: the house shelters daydreaming, the house protects the dreamer, the house allows one to dream in peace.” –Gaston Bachelard

Without a doubt, buying a home by itself is already a significant investment that would take years upon years of your savings just to be able to afford it. Unfortunately, your days of spending for your newly acquired investment do not just end at the down payment fees, and even if you have completely paid for your home in full, there are still other costs you would need to defray. You might have decided that now is the best time for you to own a home, but before signing that contract, it is imperative that you be made aware of the true cost of owning property. Sure, owning a home is a keystone of wealth and can be an avenue for a better financial better future, but if you purchase property without knowing the real costs, you might end up in a pecuniary dilemma that might be a little hard to get out of.

So, before zeroing on that BGC condo for sale, check if you would be able to handle all the expenses entailed in buying property as listed down below:

1.) Inspection and Appraisal Fees

Before you can close a deal on a home, you would need to pay for a home inspection and an appraisal as well. Although it is not exactly mandatory, you might want to have your homes inspected for pests and chemicals as well—especially if the home you are buying has been previously occupied by homeowners. These essential expenses are borne by buyers and are necessary to protect prospective homebuyers from buying a flawed property or overpaying.

2.) Taxes

No one escapes taxes, and as a brand new homeowner, it is your obligation to defray ever single property tax which generally forms part of the fees you pay every month. Regardless of whether you have a fixed-rate home loan or not, there is a chance that your property taxes would increase and consequently, so would your monthly housing costs.

3.) Home Insurance

Buying a home sans home insurance is like leaving your homes unprotected to all the outward elements that might cause harm to it. Seeing as your home would be one of the biggest investments you would ever make in your life, it should only be natural that you want to protect it. Home insurance can be quite costly depending on a variety of factors—from the construction materials used to the location of your home. However, investing in home insurance ensures that you can sleep soundly at night knowing that should anything untoward happen to your homes, you are adequately protected.

4.) Closing Costs

Of all the potential costs you are going to be paying for, this is the only cost wherein it is possible for you to negotiate. In some cases, homebuyers would strike a deal with their sellers for a contribution for these costs. However, it would be wise to be at least prepared with cash that is anywhere between two to four percent of the mortgage balance. Remember, closing costs would largely vary depending on where you are situated.

5.) HOA and Condo Fees

As a member of the community, you are expected to pay annual fees such as homeowner’s association fees or condo association fees. These fees are paid either monthly or quarterly depending on your community’s arrangement. From time to time, these fees are likely to increase—especially if there are certain needs and projects such as roof repairs, pool repairs and the like.

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