So, you are ready to make the jump into home ownership. You have budgeted for your mortgage and have saved for a down payment. But what extra costs are there when buying a home? Like many things in life, things aren’t as straightforward as they might seem. The same is true with buying and selling a home. Below are budgeting tips and some unexpected costs you might not know. 

Tips: How to Budget for Costs of Buying a Home

• Save some of your tax refund to help with the down payment or additional costs

• Pay down debt and high-interest credit cards now

• Trim your expenses — limit dining out and entertainment costs

• Be realistic when planning a budget

• Set aside a few hundred each month for closing costs and unexpected repairs. 

Unexpected Costs

• Closing Costs

• Closing costs are the fees a homebuyer has to pay at the home closing (when the title is transferred to your name). This includes application fees and homeowners insurance premiums. When planning your budget, estimate to pay 2% to 5% of the purchase price in closing costs. 

• Commission Prices

• When purchasing a home through a real estate agent, a percentage of the selling price goes to them (typically around 6% to 7%). This fee is usually paid in full at closing. 

• Home Inspection Costs

• Whether buying or selling a home, a home inspection might be a necessary expense for you. The cost of an inspection will vary depending on the size and location of the property. An inspection will help you discover any problems that need fixing before you make an offer. This will allow you to get a better deal or sell your home for the highest price. 

• Property Taxes

• Property Taxes not only vary from city to city but also within a city depending on the area of town your home is located. Often, these will continue to increase over time and are determined by assessing the value of the property and the local tax rate. 

• Homeowners Insurance

• Most of the time, before a lender lets you take out a mortgage, you must provide proof of homeowners insurance. This covers losses and damages to the home as well as items within the house. Included might be liability insurance, covering accidents on your property (falling down stairs, slipping in the bathroom, etc.).

• School Taxes

• Regardless if you have school-age children, owning a home comes with the cost of school taxes. For homeowners in Texas, visit TEA for information about school district taxes. 

• Garbage Pickup

• In San Antonio, garbage removal is included in your city taxes. For others, it may be added to your property taxes. If that is not the case, you must look into a private trash/recycling service.

Navigating homeownership can be scary, but LRG agents are here for you every step of the way. Our mission is to put people first and create meaningful, positive relationships with our clients. 

LRG's agents can help in relevant ways during home searches, home maintenance and even home improvement. Contact us at 210-879-8220 or message us on our website if you're seeking our help. You can also follow us or message us on Instagram and Facebook!