Whether you’re moving down the road or cross-country, your moving expenses will most likely exceed your budget or expectations. A majority of the blame can be placed on the inability to predict the actual price the services you have chosen will charge because no matter how much research you do to find average costs, it won’t give you the exact bill for your situation. Another part of the blame will be due to unexpected fees that may not have been factored into your original budget. For these situations, make sure to give our article on hidden moving costs a look.
Other costs that come with moving, that especially a first-time buyer may want to know more about, are the fees that come along once the deal is closed and you are now a homeowner. These are nonnegotiable monthly expenses that every homeowner will need to be conscious of.
There are a handful of monthly payments your new home will require, and most will be incorporated into your monthly payment to your loan vender, and others, like Homeowners Association (HOA) fees, utilities, and basic necessities like recycling, will be entirely separate payments.
Monthly payments to your loan vender, for most borrowers, are more than just the principal and interest payments on your loan. Your mortgage insurance (if needed) and escrow payments (homeowners insurance and taxes) are included as well.
Mortgage insurance is the only payment that may or may not be included because it is only required when a borrower doesn’t make a downpayment of 20% or more on a home’s selling price. The other payments listed on nonnegotiable.
Additional monthly homeowner fees to be aware of and factor in when deciding whether or not you will be able to afford your mortgage are those associated with condominiums, co-ops, and neighborhoods who are apart of a homeowners association (HOA). These monthly fees are not usually included in your payment to your loan vendor and can range from a couple hundred dollars to thousands of dollars. Make sure you do your research!
Monthly expenses can vary greatly, so let’s take a look at what a monthly payment might look like in a specific scenario. For example, if we use the mortgage calculator through RealEstate.com, which uses local averages to produce estimated costs, a $250,000 home in Columbus, Ohio paired with a 20% down payment and a 30-year fixed payment plan at 3.79% shapes up as follows:
Principal & Interest: $931
Property Taxes: $496
Homeowner’s Insurance: $55
This adds up to a total monthly payment of $1,455. This did not take into consideration any HOA fees or Private Mortgage Insurance (PMI), or closing fees. If these fees should be a factor (closing fees surely will be), then don’t forget to include them!
Utility bills are another monthly expense to factor in. A great tool to use for accurate estimates is Utility Score, which uses local utility rates and typical usage assumptions to deliver a trustworthy estimation. Basic utilities a homeowner will be responsible for include water, sewer, trash removal, electricity, gas, phone, cable, and internet.
Lastly, there are few other costs to factor into your monthly homeowner fees. Maintenance fees are no small thing and can include anything from replacing the light in your refrigerator to replacing the entire appliance. Other maintenance fees include lawn care services, snow removal contracts (depending on your geographic region), gutter cleaning, roof maintenance, and the list goes on. Though these are not monthly expenses, it would be wise to budget a good chunk of money monthly to stay ahead of these homeowner fees should the occasional surprise appear.
All this may seem overwhelming, but through your real estate agent MoveEasy can save you time and stress with our relocation services and concierge-level service package. With the MoveEasy platform let us make your client’s transition an experience to look forward to instead dread.