Ongoing Costs of Being a Homeowner: There are several additional costs to buying a property, aside from the initial purchase price. Being a homeowner isn’t cheap and it’s important to be aware of the many ongoing costs that you will be expected to pay once you have moved into your new home.
Knowing what to expect as a homeowner will make it easier to properly budget and ensures you on hit with any unexpected bills or fees. It’s important to keep all of the additional fees in mind when you are searching for a new property to buy. You will need to set aside a portion of your budget to account for the ongoing costs so that you don’t end up in debt.
From survey costs to legal fees to home insurance coverage, here are the many additional costs to expect when you become a homeowner.
The deposit for your house is one of the highest upfront costs that you’ll have as a homebuyer.
Most of the time, a down payment of at least 20% of the total property price is required, and the rest of the costs can be covered with a mortgage loan. For example, if the property you’re buying costs $200,000, you will need to make a $40,000 deposit to secure the property while the legal administrative tasks are completed.
If you have a lot of savings and can provide a larger down payment on the property than 20%, it’s worth doing so. The less you need to borrow from a mortgage lender, the lower the interest rates and the less you’ll need to pay back.
Your mortgage repayments depend on your credit score, the type of mortgage you have, the amount you’ve borrowed, and the interest rates on your loan. Your mortgage lender should have detailed the exact amount of money that you need to repay each month when you signed the loan contract.
When budgeting, make sure you factor in your mortgage repayments, as they can be one of the largest contingency costs of being a homeowner. If you have a variable mortgage, your repayments might vary month to month thanks to changing interest rates.
A house survey is performed by a qualified surveyor and it is mandatory by law in some countries. Even if it’s not a legal requirement where you live, it’s important to get a professional survey done to check that there are no major faults in the structural components of the property.
Sadly, surveys aren’t cheap and they can set you back a few hundred dollars and it’s a cost that you will need to pay before you can sign the contract and become the legal owner of the property.
The good news is that getting a survey done and ruling out major construction issues means that you won’t run into any nasty surprises later down the line that could cost a lot of money to fix.