When home buyers in Illinois go to purchase property, many mistakenly believe that the only cost associated with buying a home is the actual selling price of the house. However, there are several extra expenses that those buying property should account for before they make the final decision to purchase a new home.
1. Insurance
When obtaining a mortgage, most lenders will not allow those buying a home to acquire a loan unless they purchase homeowner’s insurance. This form of insurance is designed to cover the structure of the home and its contents. However, this coverage does not usually apply to natural disasters, such as floods, earthquakes and tornadoes.
If buyers make a down payment that is less than 20 percent on their mortgage, their lender may also require them to pay private mortgage insurance. This type of insurance protects a lender from default and is automatically added onto a property owner’s monthly mortgage payments. However, once buyers pay off a certain amount on their mortgage, they can often eliminate the need for this insurance.
2. Purchasing Costs
Once buyers get their mortgage pre-approved, there are several other expenses that need to be paid before the closing process can be completed. For example, buyers may be required to pay an appraisal fee to confirm the selling price of the property they want to buy, a buyer’s agent fee and a fee for having an inspection done on their future home.
3. Maintenance and Renovations
Most homes, even newer ones, require regular maintenance and repairs. This can include tasks like painting, fixing broken pipes, replacing roof shingles and more. Those buying real estate in Illinois should account for these expenses when determining how much it will cost them to own a home. Homeowners should typically plan on setting aside one percent of their home’s total value every year for maintaining and repairing their property.
4. New Items
When buying a home, buyers often do not anticipate the need to purchase new items for their home. However, in many situations, especially where buyers upgraded in terms of space, property owners may need to purchase new furniture to fill the house. In other situations, new appliances, like a washer and dryer, may also need to be purchased.
Before purchasing a home, buyers should carefully consider the overall cost of owning a house and whether it is the right choice for their personal situation. Buyers who want to make sure that they properly account for expenses that are often forgotten during the purchasing process may benefit from consulting with an attorney.
