Buying a new home and the excitement that can come with it sometimes make you forget about the secondary costs that are upcoming and ongoing. If you own a rental home or have a second home you might be even more in tune to these costs. Here's a list of expenses you might forget about until it's time to write the check.
1. PITI - That's Principal, Interest, Taxes, and Insurance. These are the four big ones that make the majority of your monthly payments. Even if your home is paid off you still can't ignore the taxes and insurance part. Of course these tend to go up when your house is reassessed and the insurance companies decide they need more money (they always need more money). Hopefully these items were correctly budgeted for before you bought the house. 2. Closing Costs and Commissions - These generally add up to be heavier on the seller than the buyer but you'll expect some of these on the front end, back end, or both. In the Chicago area purchases have separate transfer taxes by the state, county, and city. The title companies, Realtors, and attorneys need to get paid too. 3. Major Mechanical - Eventually your furnace, sump pump, hot water tank, and AC will need to be replaced or fixed. Budget some each year for these then when the big bill comes it's easier to take. 4. Lawn Care/Pest Control/Snow Removal - These are often forgotten expenses even if you do them yourself. You'll need a lawn mower, gas, shovels, snow blower, and pest control supplies. Pay for professionals to do it and you'll pay even more. 5. Basics - Move in and of course you're going to need "stuff" even if you came from a house with similar square footage. Furniture, rugs, lamps, window treatments (these can get really pricey), tools, and pictures/artwork. It's probably time to upgrade that TV too! :) Side note...lenders are really picky about big expenses before you close on the purchase of a new house. Put off buying cars, furniture, and any expensive stuff until after you close on the deal. 6. Maintenance - Things break, leak, ware out, and become outdated. These expenses come as soon as you move in and last the duration of your stay and add up over time.
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AuthorEric Strung and Direct Property Buyer Team Archives
January 2024
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*Members of Direct Property Buyer have real estate licenses held by Spartan Residential.
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