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Budgeting your ownership

Of course the purchase price is one part of owning a house, but be sure to consider all of the costs associated before you set foot in your new home.

But you need to look beyond the purchase price to all the other expenses, split into two categories : buying your home, owning your home.

Costs of buying a home

  • The down payment
  • Closing costs – Think about adding between 2 to 5% of the purchase price of the home. The good news is that some of the costs can be rolled into your loan, so you will be able to pay them over the time. But you will still have to pay the 1st month payment, transfer and property tax and homeowner’s insurance.
  • Home inspection – The cost depends of the size of the property and will be from $200 to $600. But this can save you lot of money.
  • Legal fees – You will maybe need an attorney to handle some tasks, depending of the complexity of the deal. The total fee starting from hundreds of dollars to thousands. Make sure to have the agreement in writing this will avoid surprises on the final bill.
  • Homeowner association fees – In lot of communities, condo or town-house developments, you will have to apply to the Home Owner Association. You have to consider the application fee.
  • Social membership – From Miami to Jupiter lot of communities ask for a mandatory social membership to be paid at the title company on the closing date. Be aware, some attractive purchase price in luxury community are often hiding this kind of costs.

Costs of owning a house

  • Cost of insurance – It’s more true in Florida because of  hurricane hazard. Owning a house close to the water will increase your homeowner insurance.
  • Property tax
  • Homeowner association fees and assessments – this costs will apply if you live in a condo, co-op, town-house development or gated community.
  • Utilities – It’s always good to ask the curent owner about his average costs for heating fuel, electricity, water, gas…
  • Remodeling costs – It’s often the case that to make the house you chose you dream house, you have some  fix cosmetic issues (a bit of paint or some wallpaper) but be aware making changes to kitchens and bathrooms can be expensive, of course there is the cost of cabinets, appliances and counters but don’t forget the labor which can double to triple the final cost. This doesn’t mean that you should give up on a house in need but you should calculate the costs to be sure than you can afford it.

HOA WARNING

HOA fees are the monthly maintenance fee for a condo or a community. Condo fees are variable depending on location and costs included (security and safety, maintenance of common areas and facilities, water, electricity, gas, 24h doorman, renovation, lawn …)
Be careful when you are buying a condo because the financial situation of a building may cause an increase in HOA if there is a lot of non-payment by owners or if apartments are empty.
Also beware of future renovation projects (Hurricane shutters or windows, facade renovation …). Renovation costs will impact and increase the HOA in the future.

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