You’ve crunched the numbers and decided to purchase a home. While you may be able to afford a new mortgage payment, you need to make sure that you’ve accounted for all of the long-term costs associated with homeownership. Here are seven other expenses you should know about.
Which type of loan will you get?
The loan you choose can greatly affect the amount you pay for your home over the years. You’ll want to sit down with your Texas realtor and a mortgage professional to discuss what loan best fits your situation. Just because the payments on one loan start out lower than another loan doesn’t mean it will always stay that way. Adjustable-rate mortgages and exotic loans offer attractive beginning payments but can increase substantially in the future.
What you’ll owe the government
Property taxes also can make a significant difference in a home’s ongoing costs. Do a little research on property taxes to see what the existing owners pay and how your taxes might differ if you own the home. After all, you may not qualify for the same exemptions, and the current owners may be benefiting from appraisal caps that will not be in place once you purchase the home. Taxes also vary from one area to the next – you may even find that homes relatively close to one another are subject to different taxing entities.
How much it will cost to protect your purchase
Homeowners insurance costs can vary as well. If you’re buying a home located in a flood plane, your lender will probably require you to get flood insurance. There may be other factors that will affect your premium as well, such as the building materials used in the home and whether the property has an alarm system.
Being part of an HOA
Homeowners association fees may also be in the mix. Some homeowners associations charge several hundred dollars a month. That cost may be worth it to you for the amenities provided by the homeowners association, but you should factor this cost into your buying decision.
Making repairs or remodeling
How soon will the home you’re considering need a new roof? Is the AC on its last legs? Does the carpet in the bedrooms need to go? These types of repairs and remodeling projects can cost thousands of dollars. Make sure you consider factors like these and investigate what any repairs or remodeling will cost should you decide to purchase the property. And while you’re at it, make sure to get a professional inspection on the house. An inspector can alert you to conditions that may require a significant amount of money to remedy.
Paying for the utilities
Electricity, water and other utility costs keep going up. If you purchase a house with energy-efficient features, you may save money on utilities. You may be able to look at past bills from the utility company, or you can ask the current owners if they will provide copies of their past statements. Keep in mind that their usage may not be the same as yours. You should also try to determine a home’s maintenance costs, such as how expensive it will be to keep up the yard, if the house will require repainting the exterior every so often and similar tasks.
How much will the property sell for in the future?
There’s one more item that can affect the cost of a home more than all the others combined: resale value. You may not be able to pinpoint all the variables that go into the resale value of a home before you purchase it, but it’s certainly something to consider. A smaller home in a neighborhood that’s on the upswing certainly has more resale potential than the best home in a declining neighborhood.
Whatever you do, make sure you look beyond the purchase price when you compare one home to another. Your Texas realtor can help you consider all of the factors to make sure you are getting a good deal in the long run.
For more information about buying and selling in Texas, I invite you to visit TexasRealEstate.com. For your real estate needs, please contact Waymond Lightfoot (RE/MAX Genesis) at 210-386-5201.