For the average person, buying a home is likely to be the most significant expense they will ever have to deal with. Today the prospective home buyer can expect to shell out an average of $40k in what arereferred to as “one-time” fees according to the latest reports published by Real Estate.com. It’s not just about the mortgage payment; thereis so much more to consider.
Too Much Focus on the Big Things
The problem for most home buyers is that they tend to hyper-focus on the list price of the home they are considering buying and their expected monthly mortgage payments. This leaves them not thinking about several costly and significant one-time charges, but they need to not only be aware of them, but they also need to have the money available to take care of these costs. In other words, if you are in the market for a home, not only do you need to have the required down payment, but enough cash set aside to cover the one-time closing costs, any project that needsto be taken care before and after moving, and any actual moving costs.
Breaking these costs down into a little more detail will help you to understand the “additional” costs of buying a new home. The single largestexpense you will have to faceis your down payment. The average downpayment today is 15 percent of the mortgaged amount. If you are buying a home for $250.000, a 15 percent down payment would be $37,500.
This Is Just the Beginning
- If you think coming up with the down payment is the only thing you have to worry about, you are missing out on several other costs you cannot avoid. These include, but are not limited to:
- Closing costs such as origination fees, transfer taxes, appraisal fees, your first year’s homeowner’s and title insurance, and others will add an average of $6,250 to your expenses.
- The costs of moving, having the locks changed, interior and exterior cleaning, having TVs mounted on the walls, and so forth typically add up to over 1,100.
- Other costs you need to consider, such as painting your new home to suit your tastes, carpeting, adding more furniture, can all add thousands to your final costs.
- A perfect example of this would be if you were buying a home in the Bay Area, your one-time closing costs can be over $200,000, which is more than the median price of a home in many areas of the country.
Average Costs of Buying a Home in San Diego
|City||Median Home Value||15% Down Payment||Closing Costs||Moving Costs||One-Time Costs|
Keep Stress to A Minimum
As anyone who has ever purchased a home knows, there is a lot of stress involved in buying a home. One way to help keep the level of anxietydown to a more manageable levelis to know exactlywhat your closing costs and one-time fees are going to be and to make sure you have the money set aside to pay them.