9 Expenses to Prepare for When Buying Your First Home

Posted March 20, 2017 by Paula in Advice / 1 Comment

9 Expenses to Prepare for When Buying Your First Home

If you been reading the blog you know that Cap and I recently bought a home. And you know how I love to share what I’ve learned from new experiences so here I’m going to share with you nine expenses to be prepared for when you buy your first home. Because there’s a lot more to it than just the down payment!

The Home Inspection

Some people will tell you it’s not worth it but I’m always been glad that we got one. The house looked in good shape to me and Cap but it is 27 years old so we wanted to be sure. It felt great when the Inspector said that our house was one of the best that he had seen in a long time! There were only a few minor things wrong and the sellers took care of those repairs for us.

Tip: Be sure that you are there for the inspection. For two main reasons: One to point out anything that the inspector might miss. We already knew that one of the bedroom lights flickered and needed to be checked but it didn’t flicker for the Inspector the first time they turned it on. If we hadn’t been there they would never have known about it. Secondly, you learn a lot! The Inspector told us all about home maintenance and included in his report things for to look out for in the future.

Earnest Money

Not all sellers may require this, but ours did. We put down $500 in earnest money. If everything goes through with the deal this is subtracted from your down payment so you don’t lose the money. However, if you back out of the deal because you found another house or just get cold feet then you lose the money. We would’ve got our money back if something really bad had been wrong with the house or if it hadn’t appraised for our offer.

Closing Costs

I knew to be prepared for this from my online research. You might be able to get the seller to pay for this out of your offer, but we weren’t that lucky. Closing costs can range from two to six thousand dollars. That’s a huge amount of money to cough up at one time so definitely be prepared.

Utilities

You’ll have to pay a fee or a deposit to have the utilities transferred into your name. And if the utilities have been shut off at your new home, you’ll have to pay to turn them back on. We were lucky that all our utilities were still on, so all together it was less than $200 to have everything put in our names.

Tip: Call your utility companies ahead of time to get an idea of what everything will cost. Ours ended up being cheaper than we originally thought!

New locks for your doors.

You’ll definitely want new locks which can get expensive. We just replaced the locks that were bad and then my Husband rekeyed all the others. This saved a ton of money.

Tools for the yard

I lived in an apartment and Cap lived with his grandma so neither of us had any tools for yard work. We lucked out on the mower which we bought off the seller. But we’ve had to purchase new things like rakes, wheelbarrows, shovels, a hoe, and more. Since we bought our house in Winter we’ve been able to buy a few items at a time instead of in one big swoop.

The Moving Truck

We moved all the small things ourselves but the big furniture? We hired movers for that and let me tell you that was money well spent. There was no way that we could’ve carried my couch and entertainment center down the apartment stairs. And neither of us wanted to ask our friends to help. I was too afraid of someone getting hurt. Our movers did a great job and brought us peace of mind.

Tip: Ask around. If you know someone who has moved recently maybe they can recommend a good mover.

New furniture

We needed a new bed and a new nightstand. For you, it may be different items. Take stock and be planning for any furniture that you might need at your new place.

Escrow

This isn’t really an expense but it’s definitely something to prepare for. Our lender required a 20% down payment to avoid being in escrow. We couldn’t meet that so that means that each month our property taxes and home insurance is added to our house payment. It also means that until we are out of escrow we have a monthly payment of mortgage insurance added to the house payment as well. You aren’t charged any interest on these items.

In a way, I like this. Instead of every six months paying a huge insurance payment or huge lump sum for property taxes at the end of the year, it’s all taken care of with one payment.

Now, what about you? Have you ever bought a home? Did I miss anything? Let me know in the comments!

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