Two years of consistent income, a FICO^® score of 620 or better, substantial savings plus government first-time homeowner programs that are meant to stimulate the market; All of this makes you the ideal homeowner candidate and easy to stay within budget, right? Well…

Even with all these pluses in place, putting the home buying process together can still be overwhelming. Take a deep breath and lets us discuss a few things you need to know.

Expenses That Always Shock First-Time Buyers

Purchasing your home can be a lengthy process. Even so, do not rush into it because currently, the market is favorable to sellers. Take care in estimating your costs. The add-ons can be significant.

Here are some things to consider:

Closing Costs

There are no hidden fees when purchasing a home, but costs vary with the principal of the purchase. Two to five percent of the original price is the standard cost that you have agreed to pay as part of the end transaction. The appraisal, surveyor, notary, attorney fees, insurance, and any other fees associated with buying a home are all included.

There have been cases of the seller taking care of the closing costs, but that is up to the negotiation skills of the realtors. You can also consolidate the closing costs of your loan and split the payments over time. This will help to lessen the initial dollar amount you will have to pay.

“There are no hidden fees when purchasing a home, but costs vary with the principal of the purchase.”

Title Company

The title company makes sure that any errors in the relevant documents are corrected. They also protect the owner from tax liens or tax deed omissions and provide the insurance that protects you in the case of a lawsuit. It is recommended for you, the homebuyer, to obtain two policies for yourself and the lender.

Insurance and Warranty Costs

Calculate homeowner’s insurance in your overall budget for a new home. You will need it to protect your investment. There can be several components to a policy which includes personal property protection, liability, fire protection, flooding protection, and dwelling protection.

Discuss the options with your agent because you may need to add more or less insurance depending on where you live. One great way to fit this in your buying budget is to bundle the policies. Warranties usually come into play when you are building your home from scratch, or when you have purchased a brand new house.

“Don’t over complicate the home buying process. Take advantage of any incentives or assistance for purchasing your home.”

Moving Expenses

Moving from home to home can be pricey, especially if you are moving big items like an armoire, custom-built dressers or tech smart beds. It is more efficient to hire a company to move these items and spare yourself the back pain. If you do all the packing beforehand, you can then save time and money when your movers arrive.

Maintenance

If your first home is a fixer-upper, then the maintenance costs should also be a part of your budget. Updating the window treatments and cabinets are just a few examples. Things like the age and condition of the sewage system or the central air system are often not even thought about until a few months into your home.

Acquiring all the details about the guts of the house will help to determine how you should spend and how much you can save. Don’t over complicate the home buying process. Take advantage of any incentives or assistance for purchasing your home. If you are still in the planning stages, then take this time to review and do what you can to improve your credit score.

Owning a home is a wonderful investment. Use sound financial principles, and you will be able to pass down a valuable asset to your children and save them a bundle when their time comes.