There are unexpected costs that come with buying a home, especially if you’re making the move from a rental to your first residence. According to Redfin, you’ll probably never see these costs on a lender’s checklist…but they represent real money—sometimes large amounts of it.
Even if your home is in great shape or brand new on the date of purchase, there probably will be things you want to change to make it uniquely yours. New carpet, paint or countertops, perhaps? It all adds up. If you buy a fixer-upper, of course, you should budget significant money for improvements.
Unless you’re planning to carry everything into your new home yourself, you’ll probably need to spend some money on the move-in. The more belongings you have, and the further you’re moving, the more you should budget.
If you’re buying your first home, your old apartment-dweller furniture may not do the job. Maybe you want more furniture, nicer furniture, more-coordinated furniture or fresh-new-start furniture. In any case, you’ll need a furniture budget.
Time is literally money if you need to take days off from work to complete improvements, sign documents or move into your new home. If you have vacation time available, great. If not, you may need to account for some unpaid leave when making your budget.
During the life of a home, you may need to repair or replace roofs, furnaces, carpeting, paint, shingles, shutters, windows or almost any other feature. This is one of those expenses that can really catch renters off guard. In fact, you can expect to spend between 1 percent and 3 percent of your home’s purchase price on maintenance every year.
You might be thinking, “Hey, I already pay utilities. No surprises there!” Unfortunately, you may be in for some budgetary shock when you go from paying utilities for an apartment to covering utility costs for your first home. Some utilities that are commonly included in rent (garbage collection, for instance) now are your responsibility. Additionally, the total cost of utilities you already pay—such as electricity, heat and water—can be significantly higher in a home you own.