Beware of hidden costs when buying a house…
Hey all, Andy here today.
As some of you may know, Em and I bought our first house a few months ago.
Now seems like the perfect time to look at some of the financial aspects of buying a house you might not have thought about. It’s crucial you are aware that there are going to be hidden costs when buying a house.
Home sweet home…
Buying a house is a big dream for lots of people. A life goal to tick off. And the biggest purchase most of us will make in our lifetime.
Buying a house is a big scary adventure, it’s life changing and a steep learning curve. Be prepared for an emotional roller-coaster and a bit of stress (and a few arguments, just sayin’).
Hopefully the purchase of a house will be a good debt for you: the hope is that its value will increase with time and it will be a good investment. A place for your family to live and enjoy.
It also provides you with peace of mind, and you can do whatever you want to it (hate that bright green paint in the kitchen? get rid of it!). You won’t have any more worries about rent hikes, roommates, landlords, etc!
Beware of the costs
While you may have ditched your landlord and freed yourself from rent hikes, there are a whole host of new financial factors you need to consider.
You need to factor these into your house buying budget so you don’t get caught short.
You will have to pay municipal rates (for services such as sewerage, water, trash removal). This is around $2000 per year for us.
You will need to purchase some house insurance. In fact, you will have difficulty getting a mortgage without insurance. We live in a city that has suffered some horrific earthquakes (Christchurch, New Zealand), so getting good insurance was a top priority for us.
You’ll also be responsible for all your own property maintenance (no more calling the landlord if you have a problem with the plumbing!). This can be costly, and you should allocate some funds to the upkeep of your new nest each year.
Any property purchasing transaction is going to need lawyers and paperwork, so make sure you get some quotes for these things. The paperwork you need will depend on local rules and regulations, but you can guarantee that no matter where you are, you’re gonna fork out to push some paper around Here in Christchurch it was around another $2000.
It is a good idea to write a list of all the costs down in one place, so you can keep track of them. I recommend being nerdy like me and making a spreadsheet.
Be prepared for an emotional roller-coaster and a bit of stress. House hunting can be tricky! It can cause arguments and be exhausting, particularly if you and whomever you are house hunting with have different ideas of what you want or need. Em and I argued quite a lot at this stage, but that’s pretty normal I think! You should probably discuss what you want in a house and what you don’t like before you even start looking at them. Take a stroll around your current neighborhood and discuss the houses you see. Start building a general list of things you like.
But at the end of everything, once you’ve done all the thinking, sorting, budgeting, arguing and paper pushing, you are going to be extremely happy and satisfied to own a home. Em and I certainly do, we feel like proper grown ups now!
Do you have any house budgeting stories to share? Leave a comment below.
image by Mark Moz, CC 2.0, https://flic.kr/p/ioLNoR