Expenses to Expect When Purchasing Your First Home

If after you account for all of these extra first time home buyer expenses, you can still make it work, then start packing and enjoy your new life in your ideal home.

Home Maintenance

 As a first time homebuyer one may be accustomed to a landlord taking care of all of the maintenance involved with your housing with a simple phone to and then having it fixed with no loss. As a homeowner, one does not have this luxury. If something breaks, you have to fix it.

Appliances and Furnishings

Unlike rentals, the majority of new or re-sale homes on the market do not necessarily come with all the appliances included. This means a first time home buyer are possibly going to have to get yourself a fridge, washer, dryer, and possibly a microwave before moving in. Not to mention, needing new furniture to fill larger space.

Mortgage and Homeowner’s Insurance

As a homeowner, you are going to want to protect your investment and mortgage and homeowner's insurance is the best protection. You often have to show proof that you have it when it comes time to close on your home. The insurance will protect you in case of a fire or burglary. 

Property Taxes

Another expense a first time homebuyer should be aware of is property tax. This annual tax is non-negotiable and is usually disclosed on the home listing, so you know upfront how much it’s going to be. The percentage of tax you will be responsible for will vary based on the state that you live (with an average about 1% to 2% of your home’s value).

Earnest Money

The earnest money is the money you submit to the seller with your offer. It shows the seller you mean business so they can feel comfortable taking it off the market while the sale processes. If your offer is accepted, this money gets applied to the down payment or closing costs. If the offer gets rejected, you get this money back.

Down Payment

Those seeking financing for homeownership need to prove that they are responsible enough to actually make the monthly payments, and having a substantial down payment saved up is a great way to do so. For FHA loans, you can get away with a 3.5% down payment, but most mortgages (conventional) would like to see closer to 5- 20% down.

Closing Costs

Closing costs cover everything from preparation fees to attorney’s fees. Unless you can negotiate with the seller to pay the fees, you need to plan on an extra 3-4% of your home’s value to be paid at closing to cover these charges.

As you can see there are a number of extra first time home buyer expenses that you may not have thought much about. It is really important to go into your new home feeling confident you have the financial means to owning your first home.

If you are considering buying or selling a home in the near future. Call Marquis McCrimmon, Realtor to discuss your real estate needs! Licensed in Washington DC, Maryland, and Virginia.

Call us today for your home tomorrow! 301-246-2323