By: Megan Bohannan
To determine how much you will spend on a home, you would need to prepare not only for your mortgage payment but also for closing expenses, annual payments such as homeowners' association or co-op maintenance fees, property taxes, and homeowners' insurance and utilities. It's important to consider the following hidden cost when serching for a home.
Although it may vary from state to state, closing costs typically runs around 2 to 5 percent of the purchase price. Typically closing costs include payment of your broker's fees, appraisal fees, inspection fees, escrow costs, legal fees, application processing fees, and more.
If you buy a condo, an apartment, or a house in a gated neighborhood, odds are you'll have to join the homeowners' association. The recurring payments you pay to the HOA are for the repair and renovation of structures or open areas, such as parking garages, and landscaping and other amenities.
It's important to remember property taxes when planning for a new house, as that will cost you quite a bit, depending on where you live. In Los Angeles County, for example, all landowners pay at least 1% of the value of their home, plus taxes imposed by particular county towns.
Homeowners insurance is essential for protecting your home from unforeseen events like natural disasters or having your home burglarized. The price of insurance depends on multiple factors, including the value of your home, claim history, and the deductible you choose. Insurance quotes can also vary depending on the geographic location of your home, as certain areas are more prone to fall victim to different kinds of natural disasters.