Buying your first home is so exciting. It can also be a little nerve-racking. Here are some home buying expenses to consider before becoming a homeowner.
The Appraisal
An appraisal involves having an unbiased, professional appraiser determine the market value of the home. An appraisal helps ensure that you do not pay more for the home than what it is worth. This costs an average of $300 to $400, and should be factored into your budget.
Home Inspections
Not to be confused with appraisals, home inspections more closely examine the condition of the foundation, plumbing, roof, attic, appliances, electrical system, and more. An inspection will help you understand which future maintenance repairs to expect. The average cost of a home inspection is $325.
Closing Costs
While sellers pay most of the closing costs, buyers should expect to pay an average of 2% to 5% of the home’s purchase price in closing costs. This typically includes application and recording fees, flood certification (in some areas), taxes, and title searches.
Homeowners Insurance
If you rented prior to this, you may be new to homeowners insurance. It differs from rental insurance, as that covers your liability and personal items, while homeowners insurance also covers the physical structure of a home. The average cost of homeowners insurance in Iowa is $1,205.
Home Maintenance
The nice part of renting is not being responsible for home maintenance. The maintenance that comes with home ownership may require items like a lawnmower, gardening equipment, a ladder, and a snow blower.
Homeowners Association Fees
A homeowners association (HOA) is an organization that enforces rules and regulations for the properties and residents. Purchasing a property within an HOA’s jurisdiction will require you to pay HOA fees. The fees go toward maintaining properties and shared services among the community. HOA fees vary drastically, with an estimated average of $200 to $300 per month for a single-family home.
The Big Move
The move itself can be a significant expense, especially across state lines. Depending on the size and distance of the move, hiring professional movers may cost between $300 and $5,000.
Budgeting for these costs will allow you to have a realistic price in mind when house hunting. Our team offers great insight into our mortgage products. Discover more today!
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