Are you excited to start viewing homes for sale? Most people feel excited when they decide to start looking for a home to buy, but you must understand the importance of setting a budget when shopping for a house. Setting a budget is vital, and knowing the hidden costs of homeownership can help you set the right budget. Here are some of the hidden costs to know about as you begin shopping for a house to buy.
The Earnest Money
If you want to put an offer on a house, you must provide earnest money. Earnest money is a down payment on the house that the agents hold in escrow until closing on the property. You do not need a lot of money for this payment, but you need some. If you plan on borrowing 100% of your home's purchase, you will need to find a way to come up with some money for this payment. Most deals require at least $500 down, but some might require much more than this amount.
The Escrow Account
When using a loan to buy a house, you might need to put money in an escrow account when you close on the property. The escrow account pays your property taxes and insurance, and you might need enough to cover half of these annual costs upfront. You can ask your agent if you are unsure how much you will need when shopping for a house.
One thing you should examine when shopping for a home to buy is utility costs. Every home requires utilities, but the costs vary. If you choose a home with energy-efficient systems, you will likely pay less in utilities than with a home that is not energy-efficient. You can ask the seller of a home to provide you with copies of recent utility bills so you can see how much they cost.
The Repairs and Maintenance
It is also wise to remember that you will be responsible for all the repairs and maintenance the home needs. When you rent a place to live, your landlord pays these things. When you buy a house, you become responsible for these things, and they can add up. It is always wise to budget in money for these things when buying a home.
If you are ready to view homes for sale that fit your budget and lifestyle, talk to a local real estate agent.