Hidden Costs of Buying A Home

Here are some expenses you can expect to encounter when you buy a home or property:

Closing costs. These can add up to $5,000 or $10,000, maybe more. Negotiate with the seller to split them with you. The seller may even be willing to pay most or all of these fees. The Title Company will give you a detailed estimate of these fees prior to closing.

Examples include:

• Loan application fees

• Legal fees

• Fees to the Title Company for their services

• Title Insurance

• Filing fees

• Paperwork copying fees

• Courier fees

• Property taxes

• Homeowner association dues

• Daily pro-ration for rent depending on the actual closing date

• Home inspection fees

• Termite inspection fee

• Home warranty

• Appraisal fee

• Home insurance

• Possible loan insurance

• "Points" - optional. You may want to pay some of the interest on your loan to reduce your monthly rate.

• Other fees as required by your situation

Initial expenses for your home. When you move from renting to owning a home, unless the seller puts in the contract that they're leaving these items, you may need to purchase them yourself.

• Appliances – such as a washer, dryer, and refrigerator – may or may not be included in the purchase price. Appliances like the water heater and dishwasher are considered built-in, and stay with the home.

• Curtains, window treatments, and blinds will usually stay if they're already there.

• Furniture and rugs

• Lawn maintenance tools - lawn mower, edger or weed-wacker, tree and bush trimmers

• Deposits for electricity and water service

Property taxes. These taxes are paid yearly to your local government. Your lender may set up an escrow account for you and include 1/12 of the estimated property taxes with each monthly payment; then they pay them when they come due. These taxes include:

• School district taxes

• County taxes

• City taxes, if you live within the city limits

Homeowners' association dues. These, too, are paid once each year, if you live in an area that has a homeowners' association. Depending on your association, these can be as little as $25 per year or as much as several thousand, depending on your community's amenities.

Home Insurance. Your mortgage company will require that you maintain insurance on your home. The first year's fee is collected at closing, and then they usually collect the fee for this insurance monthly and include it in your escrow account, so it will be there when the next year's fee comes due.

Home maintenance and repairs. Home emergencies, like appliances breaking down, plumbing leaks, electrical panels going out, or roof damage from a hailstorm can occur suddenly. It's easier to maintain a fund for these expenses that you add to each month, so the money will be available when needed. Keep these regular expenses in mind:

• Roof. You'll need a new roof every 15-20 years or so, depending on the local weather and your roof's warranty.

• Lawn. Do it yourself or hire a lawn maintenance service.

• Pool. If you have a pool, weekly maintenance is a must. You can also hire a pool service.

• Paint. Painting can be expensive. A fresh coat of paint every 5 years will help maintain your home's value.

Also, you may need to replace and repaint damaged walls or ceilings if you have a plumbing leak, roof damage, termite damage, rot, or holes in your wall.

Although owning your own home can be expensive, there's nothing like the pride of ownership and knowing that you're increasing the value of your investment with each monthly payment. In addition, maintaining your home's beauty brings you a joy that you just can't get with renting.