If you are in a position to consider purchasing a home, congratulations! You are taking a step that virtually everyone aspires to. It definitely is easy to get caught up in the excitement of this achievement. However, it also pays to be cautious.
You will soon have to contend with the financial pressure of meeting your home loan obligations. It is wise to be aware of other possible expenses so you can plan for them. Small oversights now can complicate your loan payments in the long run.
We have compiled a list of some of the most common expenses that eager homeowners overlook. Familiarise yourself with them before you jump headlong into an expensive home loan or you may be forced to get a debt consolidation loan as well! If that happens, try comparing debt consolidation loans for the best deal.
Read this post to know what a debt consolidation loan is and whether it is right for you.
Movers offer a range of packages for customers moving houses. Their full service usually includes packing from your old home and unpacking as well as arranging furniture at your new place. The bare-bones alternative is usually simply transporting your self-packed boxes and furniture between the two locations.
Depending on the package, the number of belongings you move, and the distance of the move, this can cost between a few hundred dollars to $10,000 or even more.
Furnishing your new home is probably going to end up being your single largest expense. In a way, it is a balance between the cost of moving the used furniture from your previous home and the cost of buying everything new.
The odds are that you want to start afresh and have brand new things to go with your new home. However, you should also consider getting second-hand items that are in good condition to lower your setup costs.
Many homeowners completely ignore insurance, especially if the property is in a safe country or a particularly safe neighbourhood. Remember, though, that insurance can cover more than just theft. Too many people find out every day that fires, water leaks, termite infestations, and other unforeseen problems can be very expensive.
Choose an insurance plan that covers as many of the basics as possible while still rewarding you with a lump sum if the need arises.
If you are moving or upgrading to private property, keep in mind that they usually have considerable monthly strata fees. This helps in the upkeep of the property and helps to maintain the value of the homes in the building and/or the locality. Some property management companies require these fees to be paid quarterly.
While the fees may not be the most significant of your expenses, they are a recurring one. You should make sure that you will be able to fit them into your budget instead of relying on a debt consolidation loan.
Your property is your own but the government will still charge you a percentage of its value in taxes, regardless of whether it is a leasehold or freehold home.
This tax is charged if you live there yourself, rent it out, or just leave it unoccupied. However, the percentage charged is lower if you reside in the property yourself. These fees are usually paid annually.
Most homeowners know that their real estate agent will take a fee that is proportional to the value of the home that was sold. However, they tend to overlook that there are legal fees as well when a property changes hands. They usually include:
- Caveat registration fees
- Conveyancing fees
- Stamp duty for Agreement for Lease
Making the decision
Many of these 6 types of additional costs are small on their own but most of them are unavoidable.
By factoring them in before you commit to mortgage payments, you will be able to make the right budget decisions. This will help you, in the long run, to build better credit and eventually upgrade to a bigger and better home.
Remember, missing just a single home loan payment can damage your credit score for years in the future. One of the ways that you can improve damaged credit is by comparing debt consolidation loans.
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