What Does Home Ownership Really Cost?
Hannah says she's ready to purchase her first home with 20% down. What other costs come with purchasing a house? Dave explains.
QUESTION: Hannah on Facebook says she's ready to purchase her first home with 20% down. What other costs come with purchasing a house? Dave explains.
ANSWER: The costs associated with closing the loan on the home, purchasing the home and recording the deed, preparing the documents, the title policies, and those kinds of things are all called closing costs. Your real estate agent—as you're purchasing the home—should be able to give you an estimate of those anytime you are making an offer. You're facing some amount of closing costs depending on how much house you're buying, and the loan amount will affect that as well.
Your long-term costs are repair and maintenance. When you're looking at the house and the mechanical things and you're having a home inspector look at the home as a part of the contract, they're looking at things like the age of the water heater and the heating and air system and the appliances. Those mechanical things are probably most likely to go out. The age and quality and condition of the roof are also inspected. Those are your long-term costs. The other long-term cost people don't anticipate is that most cities are spending more and more money—not less and less money. Consequently, most city and county property taxes are going up. They're not going down. Insurance costs seem to be going up pretty regularly as well. What you're paying for insurance and taxes today, you'll likely pay more tomorrow. Be ready for that.