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5 Expenses You Might Not Expect with Your First Home

There are a lot of unknowns when it comes to buying your first house. But a Byron Center Homes, we really want to try to eliminate as many of those “surprises” from your experience as we possibly can. We firmly believe that one of the best things you can do for your family and the security of your future is to fully understand all of the financial responsibilities that are ahead of you in the home buying process. So, as you continue with your home buying experience be aware of these 5 unexpected expenses with your first home.

#1 Property Taxes

In Michigan, renters aren’t responsible for paying any type of property tax. But, as a home owner this is a financial responsibility that you will have to take on. As you look for houses in Byron Center, we can give you an estimate as to what your property taxes might be each year. After you purchase your home, you will arrange how you want to pay your property taxes. Typically you can either divide this amount by 12 and have it added to your monthly mortgage payments, or you can choose to have this as a separate monthly expense. The choice is a personal preference and is up to the home owner to determine.

Pro Tip: Be sure to ask about potential property taxes while you are at your home showings.

#2 Earnest Money

You can learn a little more about earnest money by watching this video.

When you are buying a house, you typically need about 5{16e476496f5f3a73cb19f20a476d08f8bca71b0bf9338242f1d2bf6ed337f382}-10 of the price of the home set aside for earnest money. Earnest money are the checks you write when you submit your offer. Then, when your offer is accepted, these checks will be applied to the down payments or closing costs.

#3 Down Payment

You have probably heard that when you purchase your home, you will be expected to “put money down”. The money that you “put down” is also known as your Down Payment.

In Michigan, most mortgages prefer that you put down 3-20{16e476496f5f3a73cb19f20a476d08f8bca71b0bf9338242f1d2bf6ed337f382} of the cost of your home.

If you are buying a home in a rural area, you might be able to get approved for a USDA loan, which means you don’t have to put any money down on your house. Be sure to ask your realtor if the area you are looking at purchasing a home complies with the USDA loan regulations.

Pro tip: When you are considering the price range of the homes that you are interested in buying, figure out how much 5-10& of that amount is and make sure that you have it in your savings. If you don’t have this money up front, you may need to lower the price of home that you are interested in purchasing.

#4 Homeowners Insurance

Homeowners insurance isn’t much different than car insurance or health insurance. The way it works in pretty simple, you call an insurance agency, give them the information about your home and they will give you an estimate for what you yearly homeowners insurance might be. You will then pass that estimate on to your realtor. In Michigan, you cannot complete the closing process until you have contacted potential homeowners insurance agencies.

Pro Tip: Ask your realtor ahead of time if you homeowners insurance will be a separate bill each month or if it will be calculated into your mortgage payments.

#5 Appliances

Just because appliances are in the home during your home showing, does not mean that they will necessarily be included in the sale of the home. If the appliances are not included in your home, you will need to calculate the cost to replace them.

Pro Tip: As you attend showings, be sure that you ask your realtor if the appliances are part of the closing deal.

Are these expenses costs that you have already been aware of? If not, be sure that you sit down with your partner and attempt to add up how much they will cost you each month. The more that you are aware of ahead of time, the better you will be in the long run.

If you have any other questions, please post them in our comments below. We want to know what else we can help you with.

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