If becoming a homeowner scares the shit out of you, welcome to the club.
We're here to guide you through the confusing and pricey world of home buying. By paying rent through Bilt Rewards, you can improve your credit score as well as use your Bilt Points towards a down payment on your future home.
In addition to being an extremely exciting and rewarding journey, owning a property is also expensive and comes with many responsibilities. You no longer have the ability to call your landlord when your freezer stops working or your bathtub is clogged — it’s now your responsibility.
When it comes to purchasing a house, down payments are widely talked about, but becoming a homeowner involves many other costs that you may not have anticipated. In lieu of being surprised by unexpected costs when becoming a homeowner, we want to make sure that you're fully aware of the costs associated with purchasing a home.
When you close on a house, that means the property is legally transferred from the seller to you. You should expect to pay 2%-3% of your loan amount in closing costs in addition to your down payment. So on a $200,000 mortgage, you’ll need to come up with between $4,000 and $6,000 in addition to your down payment.
Closing costs include application fees, appraisal fees, attorney fees, homeowners insurance, inspections, and a laundry list of other costs.
Before closing, a home inspection enables a buyer to recognize major problems before moving in and negotiate fixes. Major things that inspectors look for include water damage, structural damage, damaged roofs and electrical systems, plumbing issues, insect infestations, and problems with the HVAC system. Following the inspection, it's up to you and the seller to decide who will pay for the repairs.
As a result of the current competitive housing market, people are lining up to buy houses without inspections. So if you're considering buying a house, be aware that there is less room for negotiations, so you might have to make repairs yourself.
Creating a picture-perfect curbside appeal and backyard oasis may be more expensive than you anticipated. It is not only expensive to design and install landscaping, but also to maintain it.
You will need to decide who will take care of your outdoor space. A landscaper will charge you about $100 a month to maintain your property, or you can do it yourself.
If you do it yourself, it is still going to cost you. Now you'll need a lawnmower, weed-wacker, fertilizer, a hose, sprinkler, rakes, etc. If your garage isn't big enough to hold all your tools, you'll also need a shed for them.
Homeowners are typically responsible for whatever falls into their yards. Unfortunately, if a storm knocks your neighbor's tree into your yard, you're responsible for the clean-up and damages caused to your property.
The first thing neighbors and friends see is your home’s exterior, so you might want to update the exterior before updating the interior. The cost of re-painting your house or installing shutters can eat into your budget, even if you're not doing a full renovation.
If you love the layout of your new home but not the wallpaper or jarring colors from previous owners, build a budget to paint all of the rooms. Unlike your 850-square foot apartment, painting an entire home and all of the surfaces can quickly add up.
Once you become a homeowner, you no longer have the option to call your landlord when any of your appliances start acting up. You're now responsible for assessing the problem, hiring someone to fix it, or in the worst-case scenario, replacing the appliance.
The cost of homeowners insurance is much higher than that of the renter's insurance you've been paying on your apartment. You should be prepared to significantly increase your monthly payment. Your insurance policy will make sure that your home and belongings are protected in case of an emergency.
The average cost per year for insurance is $1,250, which takes into consideration location, credit history, age of your home, and attractive nuisances, like a pool or trampoline. Additionally, residents of a hurricane- or earthquake-prone regions will need to purchase an extra level of protection.
It is likely that you have thought about the cost of replacing your old furniture from college and getting all new big-ticket items - indoor and outdoor furniture - but you did not anticipate all the small furnishings.
Prepare to give Target and Homegoods a few paychecks. All the little things, like throw pillows and canisters to organize your pantry like Marie Kondo, will quickly add up.
Just when you thought cleaning your apartment was annoying, get prepared to clean an entire house. You'll need more supplies, maybe multiple vacuums, and at least double the time. Since your time is valuable, it might be worthwhile to hire a cleaning service. Cleaning services can cost $100 or more per visit, adding up to more than $1,200 per year.
While these aren't the only unexpected expenses you might face, they rank among the most significant among first-time homeowners. Luckily, you can now use your Bilt Points to help reduce the amount of cash you’ll need to throw down when purchasing a home.