Know All the Costs of Homeownership
Like most homebuyers, you’ve spent some time doing your research and have an idea of what you’re looking to spend on a mortgage and down payment. However, when you start to dig a little deeper, you may realize there are more costs to consider before becoming a homeowner.
Here are all the additional costs you should take into consideration when planning to purchase your new home:
Closing costs are the fees you pay at the closing of your home. These costs include your loan origination fee, inspection, appraisal, surveying and broker fees, as well as title search, insurances and taxes.
Property tax is an ongoing cost (as long as you own the property) and can vary by location and house. In most states, property tax is calculated based on the assessed value of the property and the local tax rate. This cost can be attached to your monthly mortgage bill through an escrow account.
Before taking out a mortgage, your lender will require proof of homeowners insurance. This expense covers losses or damages to the house, with options to cover valuable items within and liability against accidents that might occur at the property. This cost can be attached to your monthly mortgage bill through an escrow account.
If you don’t have 20 percent of the final home sales price to put towards your down payment, you will likely need to obtain private mortgage insurance (PMI). This insurance protects the lender if you default on the loan. Annual mortgage insurance premiums can range from about 0.2 percent to over 1 percent of the total loan amount.
Electricity, gas, water, sewer, internet, pest control and trash service expenses could add up to a substantial amount. Depending on the size of the house or how many rooms it has, you may use more electricity to light, cool or heat your home. Also, consider that you may use more water to keep your lawn green.
Many homes are located in neighborhoods that collect Homeowners Association (HOA) dues. These monthly dues vary by neighborhood and the amenities they provide, such as community pools and parks.
Maintenance and Repairs
Maintenance refers to ordinary expenses that come with running a home, such as lawn mowing, gutter cleaning and housekeeping. Repairs refer to anything that breaks, such as leaks or appliance wear. You may need to purchase tools, supplies and equipment to maintain your home yourself or prepare for the costs of hiring someone to take care of it for you.
Buying a home is a big financial commitment, so that is why it’s important to prepare and take advantage of programs that can save you money. RBFCU is the one-stop shop for homeownership, offering all the resources, including real estate and insurance agents to help you save time and money. When you take advantage of RBFCU’s homebuying and selling services, you can enjoy exclusive member benefits.*
In partnership with Kuper Sotheby’s International Realty, Domain Mortgage and Preserve Title, the Member Benefit Program is designed to give you up to 10% of your agent’s earned commission back to you at closing.
*Calculated on up to 3% commission earned by the RBFCU preferred real estate agent, up to a maximum of a $10,000 credit. Homebuyers are eligible to receive up to 10% of the agent’s earned commission, which will be credited on the closing disclosure and applied to closing costs and prepaid items. To be eligible for commission credit, you must be an RBFCU member, use an RBFCU preferred real estate agent (Kuper Sotheby’s International Realty) and at least one preferred provider¹ (Domain Mortgage NMLS# 862516, Preserve Title Company or RBFCU Mortgage NMLS# 583215), and notify the RBFCU preferred real estate agent of your interest in the program prior to projected closing date and execution of contract. RBFCU member benefit program is subject to change without notice. RBFCU mortgage loans are available only on property in Texas. All loans are subject to credit approval. Kuper Realty Holding Company, LLC dba Kuper Sotheby’s International Realty, RB Mortgage LLC dba Domain Mortgage, Preserve Title Company LLC and RBFCU Insurance Agency LLC are subsidiaries of RBFCU Services LLC. RBFCU Services LLC is affiliated with Randolph-Brooks Federal Credit Union (RBFCU). Insurance products are not deposits; are not obligations of the credit union; not NCUA insured; and not guaranteed by RBFCU Insurance Agency LLC, RBFCU Services LLC or RBFCU.
¹Buyer is required to use Domain Mortgage or RBFCU Mortgage to finance the purchase of the property; Seller is required to use Preserve Title Company for the sale of the property in order to be eligible for commission credit.