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8 Hidden Costs When Buying a Home

by Rebecca Bradshaw

You’ve saved for a down payment and calculated how much mortgage you can afford, but are you prepared for hidden costs that can occur when buying a home?

  1. To determine the property’s true worth, you will be expected to pay for a home appraisal. The appraisal not only assures that you aren’t overpaying, but can also be used as a negotiating tool when making an offer to the seller. An appraisal can cost as much as $500.
  2. A home inspection will determine if there are any problems with your new house. Professional inspectors will look for flaws in the home’s foundation and roof, as well as check for potential costly issues in its electrical, heating, and water systems. An inspection can range from $200 to $500, but is well worth the expense.
  3. You may need to pay for additional inspections, such as a land survey to determine property lines, or for termite, sewer, chimney, or other ancillary inspections. While not overly expensive on their own (a few hundred dollars each), they can be costly when combined.
  4. If an inspection turns up issues that the seller won’t cover, or if you purchase a house that isn’t in perfect condition, you may find yourself spending money on repairs and cosmetic changes before you move in. Figure in the cost of painting, upgrades to appliances, and other expenses when planning your budget.
  5. Purchasing a home warranty is optional, but is an out of pocket expense you might want to undertake right away. Running as high as $500, a good home warranty can offset the cost of pricy repairs, ultimately saving you thousands of dollars. In some cases, you may be able to negotiate with the seller to pay for the warranty at closing.
  6. Closing costs generally run between 2% – 5% of the total purchase price, and although the seller may pay for all or part of them, you may still be responsible for a portion. Be prepared to pay private mortgage insurance if your down payment is less than 20%, as well as for property taxes, and fees for title searches and other filing costs.
  7. Don’t forget moving costs. Professional movers can be expensive, depending on the time and distance of the move. Consider, too, if you’ll need to purchase new furniture or appliances, or, if you’re downsizing, whether you’ll need to rent a storage unit.
  8. You may find that you are required to have additional insurance, or that the water heater that passed the home inspection stops working right after you move in. Unexpected expenses can occur when buying a home, so plan to put aside an emergency fund.

 

Sources: US News/Money, Life Hacker, Real Estate Solutions, Campbell & Keller Team       

 

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How Much Mortgage Can Your Lifestyle Afford?

By Rebecca Bradshaw

There’s no getting around it, buying a home is expensive. Saving money for a down payment and then living within your means takes plenty of advance planning, strict budgeting, and might even require making a few sacrifices. But what if you have a lifestyle that you love—hobbies, sports, and other interests, that you aren’t necessarily willing to give up in order to own a home? Just how much mortgage can your lifestyle afford? The good news is that with some adjustments, you should be able to become a homeowner while continuing to do the things you love, and all without going broke.

Start by budgeting wisely.

In general, financial experts recommend that your mortgage payments (which include principal, interest, insurance, and taxes) should not come to more than around 28% of your gross monthly income. Be realistic about how much house you will actually be able to afford while still enjoying doing all the things you love and plan your home search accordingly.

Keep in mind, too, that the more money you put down on your new home, the lower your monthly mortgage payments will be. A twenty percent down payment is traditional, though there may be alternative funding programs available that require you to put down much less. Do your homework, talk to your financial institution, and look for the best option that will help you continue to live within your means while still holding on to your lifestyle.

Be willing to compromise.

If traveling is your passion, but you’re afraid that homeownership will cut into future vacations to exotic locations, consider purchasing a house that won’t take such a huge bite out of your monthly budget. Be flexible when it comes to travel opportunities as well.

You can save a lot by visiting locales that are off the beaten path, or by traveling during the off-season. Search travel websites for deals on cruises, hotels, tours, and other savings. The same types of compromises can be applied to your other interests and hobbies as well.

Get creative with your lifestyle budget.

If you’re a theater buff, but visiting Broadway just won’t work in your home buying budget, then check out local websites for community productions of award-winning plays. Sign up for updates from websites such as Living Social for discounts on everything from skydiving to upscale spa weekends. Or, if shopping is your passion, bargain hunt for clothing or home décor on sites or save up for a once a year sample sale splurge, and consider shopping at consignment stores. Don’t overlook the simple luxuries; if you’re a gourmet food lover or wine connoisseur, try indulging in a good merlot with a home cooked meal rather than going out to an expensive restaurant.  Offers on everything from free or discounted tickets to concerts or sporting events, manicures, gym memberships, wine tastings, and golf getaways can all be found online with just a little time and effort.

Sources: Nerd Wallet, stephanieoconnell.com, learnvest.com

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4 Beautiful Countertops to Complete Your Kitchen

By Jacklyn Renz

Everyone loves to daydream about a kitchen remodel. From cabinets to appliances, there are renovations that can make your kitchen more customized for the daily grind of our chopping, cleaning, serving, and eating. A recent survey gave us some interesting insight into the remodeling desires of people just like you: out of 7,812 survey respondents, 94% planned to replace their countertops. So, where do you turn for a fresh countertop? Here are 4 ideas to get you started.

Hardly a Contest

Of all the natural stone materials, granite is one of the most popular. Granite is naturally formed when molten magma flows into areas of stone and slowly cools. Since no two granite samples are alike, they lend themselves a uniqueness unmatched by man-made designs. Varied colors appear due to the unique makeup of each slab. Granite stands up to knives and hot pots, but be careful of chipping. Any dent in the top means a pro out to repair. The upkeep for granite is a little more involved than most, with the need for periodic sealing to maintain its stain resistance.

Make a Statement

Countertops that make a statement are a fantastic choice for standalone pieces such as an island, wet bar, or pull-out slab. Serving not only as practical surfaces, countertops made of marble lend themselves as conversational pieces and add a point of luxury to your kitchen’s look. This choice of countertop may need a little daily TLC, steering clear of acids, knives, and staining foods. With the proper preventative care, marble will last a lifetime while giving your kitchen a boost in elegance!

Easy on the Budget

For many of us, the kitchen is a place of hustle and bustle, meaning that we need the added practicality of an easy to maintain top. Laminate has been so updated in recent years that it can look the part of its expensive counterparts, without the added expense. This particular option stands up to water, scratches, and stains. It’s a great family choice with no preventative maintenance needed. Keep in mind that it’s sensitive to heat, so keep the trivets handy. Laminate countertops come in a variety of colors and styles so they can blend into your current décor without a problem.

From the Chef

To borrow from commercial kitchens, stainless steel is both a practical and beautiful choice. Incorporate this material on all surfaces or choose a high-traffic area. These are hygienic and tough. Stainless steel is heat resistant but is easily scratched. This option will mesh well with existing appliances and backsplashes, making a great choice if you are picking just one element of the kitchen to change.

Since the countertops are well-loved and highly used, choose which you love the most and opt for professional installation to have new countertops that last the life of your home.

 

Sources: houzz.com, hgtv.com, countertopguides.com

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