Country Minute: Costs Beyond the Mortgage
Joel Norkus, Financial Service Officer
GreenStone June Country Minute


When it comes to planning ahead and saving money, knowing all the hidden costs of owning a home is key in being fully prepared. Now that you are officially a homeowner or in the home buying process, you may be wondering what costs to expect.  

When you are in the home buying process, there a few costs many people forget to include in the budget. Depending on your loan type, there will be a down payment necessary at closing. This cost can vary, often between 3.5 percent to 20 percent of the home cost. This can become a significant cost, making it important to calculate it into your costs when looking at homes. For example, if you are looking to buy a $100,000 property and put 20% down, that's a $20,000 down payment. If you have only $20,000 saved, you’ll want to keep reading to learn about the other home cost considerations.   

Many lenders also factor in something called reserves, commonly referred to as rainy day funds. It’s important for you to you have enough funds in case of an emergency. These reserves are usually considered two months' worth of funds with all your monthly bills factored in, along with taxes and insurance, and any other debt such as a car payment, student loans, or credit cards.    

During the loan closing process, there will also be closing costs. Closing costs are the fees accumulated during the loan process and transferring the property from seller to buyer. Fees may include appraisal, title, closing, flood, credit report, recording, survey, and inspection costs. Check with your mortgage lender and realtor to better understand the estimated costs.   

Insurance is also necessary during the homebuying process. Before you can take out your mortgage, you must be insured. You’ll need to purchase homeowners' insurance and provide proof to your mortgage lender. Don’t forget this is also a monthly cost! Property tax is another ongoing expense that can be overlooked. Varying from town to town, you’ll have a property tax payment that can be folded into the monthly mortgage payment.  

The title of homeowner comes with a few more costs you must budget for. You are now in charge of your landscaping, trash service, all utilities, and necessary maintenance. Utilities such as water, gas, and electricity are monthly bills that can vary each month based on usage. Trash service and internet/cable are often set monthly bills that shouldn’t vary. Your mortgage payment along with taxes and insurance should also be included in your budget.  

Landscaping is another forgotten cost that can quickly surprise you in the spring. Spring is also a good time to give your house a thorough check for any necessary maintenance; for instance, roof damage, HVAC repairs, and filter replacements. For more information on home maintenance, visit Spring Cleaning For Your Home | GreenStone FCS.  

Buying a home is no easy task, but our Financial Service Officers are determined to help you with every step along the way. While the loan process can feel overwhelming and vague initially, GreenStone has a no surprise policy. Our financial services officers will be as explicit as possible on the process and the costs. Our goal is to make this process as smooth and easy as possible for all buyers. Your team is ready to help answer your questions, reach out to them today! 



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