When determining how much home you can afford, you should also include and anticipate the other costs of buying a Lakeland Fl home. Most home buyers get too caught up in the dream of owning a home that they only think of the down payment and selling price and forget to include these extra costs:
1. Private Mortgage Insurance
If your down payment is less than 20%, the PMI is added to your mortgage. The PMI is the lender’s safety net should a homeowner default on their loan. As you build equity, the PMI gradually decreases.
Property taxes may vary depending on the area or state, but on average, property tax is 1.38% of a home’s value. Property tax is one of the ways to generate revenue for the local government, counties, and school.
3. HOA Fees
Homeowners’ Association fees (HOA) can set you back a few hundred dollars every month. HOA fees cover maintenance of common areas for condominiums or subdivisions.
4. Homeowner’s insurance
Once you get a property on loan, the lender will require you to get homeowner’s insurance. The amount depends on lots of things like your location, type, size, and age of the home. Older homes may have a higher insurance since they may need more repairs than the newer homes. Homes in high-risk areas may also cost more to insure, though some insurance companies may not even give you home insurance if you are planning to buy a home in a high-risk area.
5. Utilities and appliances
If you are used to renting, you may overlook this item since appliances and utilities are usually taken care of by the landlord. But once you are a Lakeland Fl home owner, make sure to include expenses such as repairs for broken water heaters or dishwashers. Make sure to set aside a certain budget each month for home repairs.
6. Inspections, appraisals, and closing costs
Most homebuyers are aware of closing costs but overlook other things like home inspections. In some cases, it is the seller who pays for the home inspection but generally, the buyer shoulders the cost of home inspection. Even if the seller already had a home inspection done, a buyer might still want to hire his or her own inspector just to be on the safe side. Other inspections could also be required depending on the home such as inspections for pest, lead paint, or radon gas.
Before you buy your Lakeland Fl home, make sure to include these items and carefully budget all your expenses so you could have a hassle-free home buying experience with no surprises.