Congratulations! You’ve decided to buy a home—cue the celebrations, Pinterest boards, and dreams of Sunday brunches on your new patio. While home buying is an exciting milestone, it comes with a few surprising costs that could catch you off guard if you’re not prepared. At KTR Loans, we’re all about transparency (because someone has to be) and helping you avoid those “Wait, what?” moments when it comes to financing your dream home.
Here’s a breakdown of the lesser-known costs of purchasing a home that you should factor into your budget. Spoiler alert—there’s more to this than just the down payment.
1. Home Inspection Fees
Think of your home as a potential Tinder match. You’d probably want to learn as much as possible before committing, right? A home inspection brings in a professional to give your future digs a thorough assessment to make sure there aren’t any hidden heartbreakers looming in the walls or foundation. This will typically cost you anywhere between $300 to $600. Trust us, it’s worth every penny to avoid surprises down the line—like a roof leak that turns your living room into an unplanned swimming pool.
2. Appraisal Fees
Before your lender gives you the green light on your mortgage, they want to ensure your soon-to-be home is worth the price you’re paying. Enter the appraisal—a process that determines the current market value of the property. This will set you back around $300 to $500. Think of it as making sure you’re not spending Gucci-level money on a knockoff handbag.
3. Closing Costs
Ah, good old closing costs—the infamous cousin of the down payment that no one really warns you about. These fees include items like title insurance, attorney fees, loan origination fees, and other administrative expenses that come with finalizing your home purchase. You’re typically looking at 2% to 5% of the home’s purchase price. Yes, it’s a bit of a bummer, but you can’t skip these—unless you miraculously find a way to get the keys without signing 37 documents. (Pro tip: Get a breakdown of your closing costs in advance so you’re fully prepared.)
4. Property Taxes and HOA Fees
Property taxes don’t end when you purchase your home; they start. Many lenders require buyers to pay a portion of the property taxes upfront at closing. If you move into a neighborhood with a homeowner association (HOA), you might also face additional fees for things like lawn maintenance, community gyms, or that fancy pool you plan on using twice a year. These costs vary, so ask about them before you commit.
5. Moving Expenses
Whether you’re calling up the pros or bribing friends with pizza and beers to help you move (classic strategy), moving costs can add up. Factor in expenses like truck rentals, packing supplies, and, potentially, storage. It’s easy to spend a couple of hundred dollars on moving day. And if you have a sectional sofa that’s roughly the size of a small whale, you may need additional help (sorry, but your best friend’s Honda just won’t cut it).
6. Maintenance and Repairs
Your new home may have that “freshly bought” smell, but that doesn’t mean it’s maintenance-free. Even with a pristine house, responsibilities like landscaping, HVAC servicing, and general upkeep will pop up. Oh, and if something breaks (we’re looking at you, water heater), that’s on you now. Having a “rainy day home repair fund” is never a bad idea.
7. Utilities Setup and Deposits
Remember, as magical as your new home is, it’s not much fun without running water, electricity, or Wi-Fi. Setting up utilities often comes with extra costs, like connection fees or deposits. Some companies charge extra if the home doesn’t already have services, so double-check before you end up scrolling Instagram on cellular data all month.
8. Private Mortgage Insurance (PMI)
If your down payment is less than 20% of the home’s price, you might need to purchase private mortgage insurance. PMI protects the lender in case you can’t make your payments and typically adds 0.5% to 1% of the loan amount annually. It might not be as exciting as upgrading your bathroom fixtures, but, hey, what can you do?
9. Furnishings and Upgrades
You probably didn’t buy the house thinking about paper-thin curtains or hand-me-down furniture, but sooner or later, the urge to redecorate kicks in. New furniture, fresh paint, and maybe even some rugs can snowball into a bigger investment than you planned for. Pro tip: Don’t blow your budget all at once—prioritize what you need now versus what can wait.
Let’s Get Started!
Purchasing a home is one of the most exciting (and rewarding) things you’ll do, but it’s not without its hidden costs. By budgeting for these extras in advance, you can avoid stress and focus on enjoying your new space—you know, the important things like christening the kitchen with your cooking skills (or the number for the nearest takeout joint).
At KTR Loans, we’re here to make the process as smooth as possible and answer all your “Is this normal?” questions. If you’re thinking about buying a home and need advice, give us a call today. We can’t promise to help you move the sectional, but we can promise to find the right mortgage for you!
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