Budgeting for a home purchase: it’s not just about the down payment

A picture of a house

When buying a new house, there are often a lot of expenses you don’t always expect and they can add up fast. To prepare for these and ensure that you have the funds available to deal with them, it is important to budget carefully and save up in advance.

Here are some expenses that you should prepare for:

  1. Home inspection fees: A home inspection is a thorough examination of the property to identify any potential problems or issues. The cost of a home inspection can vary, but it is typically between $300 and $500.
  2. Closing costs: Closing costs are the fees associated with buying a home and can include things like attorney fees, title insurance, and property taxes. These costs can add up quickly and can be as much as 3-4% of the purchase price of the home.
  3. Moving expenses: Moving to a new home can be expensive, especially if you hire professional movers. Be sure to budget for the cost of packing materials, truck rentals, and any other moving expenses.
  4. Furniture and home decor: After you move into your new home, you may need to purchase furniture and home decor to make it feel like your own. These costs can add up quickly, especially if you are starting from scratch.
  5. Repairs and renovations: Even if you have a home inspection, there may still be repairs and renovations that need to be done. These costs can range from minor repairs to major renovations, and they can add up quickly.
  6. Landscaping: If you have a yard, you may need to hire a landscaper to create a new garden or to maintain the existing plants and trees. These costs can vary depending on the size of your yard and the complexity of the work.
  7. Home security: Installing a home security system can be an unexpected expense, but it can also give you peace of mind and protect your home from burglaries.
  8. Pest control: If you live in an area with pests, you may need to hire a pest control company to treat your home and keep it free from pests.
  9. Home insurance: Home insurance is an important expense to consider when buying a house. It will protect you in case of any accidents or disasters that may occur on your property and it is typically required when you get a mortgage.
  10. Maintenance: Owning a home means that you are responsible for maintaining it. This can include things like replacing the roof, painting the exterior, and fixing any appliances that break down. These costs can add up over time and should be factored into your budget.

By being aware of these unexpected expenses, you can better prepare for the costs of buying a home and ensure that you have enough money to cover all of your expenses. It is always a good idea to save up an emergency fund and to budget carefully to avoid any unexpected financial surprises.