Blog by Laura Minor from Sprintfunding (https://sprintfunding.com)
Entering the world of home buying can be an exciting yet daunting experience, especially when navigating the complexities of the real estate market.
Mistake 11: Missing out on assistance programs
Assistance programs can be a great resource for new homebuyers, providing financial aid and valuable support throughout the home buying process.
But many home buyers are unaware of these programs, or simply overlook them when searching for a new home.
What to Do
Don’t miss out on these resources that can ease the financial burden of homeownership.
To help you, here’s a breakdown of some common assistance programs and what they have to offer:
– Down payment assistance programs: These are designed to help you make the initial payment on your new home. They might include grants, deferred payment loans, or zero-interest loans.
– To find a program in your area, research local government or housing agency websites.
– First-time homebuyer programs: If this is your first time purchasing a home, you might be eligible for special programs that offer financial assistance, education, and guidance. These programs can include low-interest loans, access to HUD homes, or assistance with closing costs.
– Low-income assistance programs: These are targeted at buyers with low income levels and can come in the form of grants, affordable housing, or low-interest loans. Discover what’s available in your area by checking out your local housing agency or HUD’s website.
Consider the following list of resources where you can find more information on assistance programs:
1. Dept. of Housing and Urban Development (HUD)
2. National Council of State Housing Agencies
3. Local government websites: They often have sections dedicated to housing and assistance programs.
4. Real estate agents: Choose an agent with knowledge of local programs who can guide you through the process.
Mistake 12: Ignoring Moving and Other Upfront Costs
Consider not only the purchase price of the home, but also the additional costs that come with moving and settling in.
Being aware of these expenses can prevent financial stress and surprises along the way.
Here are some of the common moving and upfront costs often overlooked by homebuyers.
1. Moving Expenses: Depending on the distance and quantity of belongings, professional movers’ fees can vary widely. Remember to budget for packing materials, moving truck rentals, and other costs that might be applicable to your specific moving needs.
2. Home Inspection: It’s wise to have a thorough home inspection conducted before buying a property. This can uncover potential problems and help ensure you’re making an informed decision on the purchase. Home inspection fees typically range from $300 to $500, but the cost may vary.
3. Closing Costs: Generally, closing costs can account for 2% to 5% of the home’s purchase price. These costs may include appraisal fees, title insurance, loan origination fees, and various other expenses.
4. Utility Set-up: Setting up utilities in your new home may require small deposits or activation fees that should be incorporated into your budget.
5. Property Taxes and Homeowner’s Insurance: Alongside the mortgage payment, you will likely need to account for property taxes and homeowner’s insurance – both of which can be substantial expenses, depending on the location and value of the home.
Mistake 13: Overlooking the hidden costs of homeownership
Costs in buying a house can be higher than you might expect. If the initial shock of your monthly mortgage payment wasn’t enough, wait until you tally up all the other expenses that come with homeownership.
As a newbie to owning a home, you’ll need to budget for things like property taxes, homeowners insurance, utility bills, and just the regular maintenance and upkeep that any home requires.
When you add it all up, you could be looking at spending thousands extra each year on taxes, insurance, and keeping your home in good shape.
Without a bit of extra room in your monthly budget or a solid emergency fund, these additional costs can quickly turn your financial situation sour if you’re not ready for them.
Here are some hidden costs that can come with your house buying:
1. Property Taxes
Property taxes are annual or semi-annual payments that you make to your local government based on the assessed value of your property.
These taxes can vary greatly depending on your location. To estimate your potential property tax burden:
– Look up the local tax rate in your area.
– Determine the assessed value of the home you’re considering.
– Multiply the tax rate by the assessed value to calculate your annual property tax bill.
2. Homeowners’ Insurance
Homeowners’ insurance protects you against losses due to accidents, natural disasters, and other unforeseen events.
While it’s not always required by law, most mortgage lenders will insist on it. Factors that affect your insurance premium include the home’s age, location, and total value.
Make sure to shop around for the best insurance rates, as the price can vary significantly between providers.
3. Maintenance Costs
Homeownership comes with the responsibility of maintaining your property, and these expenses can add up quickly.
What to Do
– Set aside a home maintenance fund that covers at least one year’s worth of maintenance costs.
Have a Smooth Home Buying Journey
By considering these hidden costs of homeownership, you can better prepare for what lies ahead and make informed decisions when purchasing your new home.
Remember, it’s always best to be aware of all the expenses involved in owning a property to prevent any financial surprises.
For assistance in navigating through the financial aspects of your home purchase, contact Sprint Funding.
