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What were your HIDDEN EXPENSES when you bought a house?



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amother
Jetblack


 

Post Thu, May 28 2015, 2:08 pm
What were your HIDDEN EXPENSES when you bought a house? (That your mortgage broker, or bank did not tell you).
When you buy a house, you have the asking price, let’s say around $750.000.

1: What where the expenses that came up the first year or two, that you had not expected? Not including renovation.
I want to have an idea, how much it might end up costing me average monthly, as there will probably be more expenses that the monthly mortgage itself.
Taxes?
Extra fees?
Violations?
Other stuff?

2: Was this for a regular sale of a foreclosure?

3: How much did you end up having to pay your mortgage broker?

Thank you all for answering.
Hope this will help me and others that read this, on the road to buying a house IY”H.
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samantha87




 
 
    
 

Post Thu, May 28 2015, 3:26 pm
amother wrote:
What were your HIDDEN EXPENSES when you bought a house? (That your mortgage broker, or bank did not tell you).
When you buy a house, you have the asking price, let’s say around $750.000.

1: What where the expenses that came up the first year or two, that you had not expected? Not including renovation.
I want to have an idea, how much it might end up costing me average monthly, as there will probably be more expenses that the monthly mortgage itself.
Taxes?
Extra fees?
Violations?
Other stuff?

2: Was this for a regular sale of a foreclosure?

3: How much did you end up having to pay your mortgage broker?

Thank you all for answering.
Hope this will help me and others that read this, on the road to buying a house IY”H.


Oh boy. Home ownership is expensive. When calculating your monthly mortgage payment, taxes are usually added in, and sometimes insurance too, so those should not be surprises. But all the other costs that come up...

For example: the fridge and the hot water heater broke and needed to be replaced immediately, within the first 18 months. On the other hand, our ancient furnace is still going 5 years later, so you never know. We also had some water damage from a leaky roof during a rough winter, for which repairing is surprisingly complex.

Just be sure to always have a few thousand dollars ready for whatever may go next.
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self-actualization




 
 
    
 

Post Thu, May 28 2015, 3:57 pm
Here you go:

Your house costs $750k let's say.

So really you should be putting at least $150k down payment to get to 20%.

If you don't put down 20% then you may need to pay PMI - Private Mortgage Insurance - on your insurance, in order to make the mtge company feel comfortable that you are able to pay it. That's a cost.

Let's say you put down $150k and your mtge is $600k. That's more than the $417k conforming limit - so you need to see if you are getting a higher interest rate or if your neighborhood qualifies for "conforming jumbo" loan. I'm not a mtge professional so I don't know.

Then your mtge on a $600k loan would be something like $3500 a month? Let's say. And if your annual property taxes are $12k, then you would add another $1000 to get to $4500 a month. The taxes are taken out of your bank account along with the mtge, but you do usually get the first couple of months free of taxes because those are paid at the closing. Then add homeowner's insurance - ours in around $150 a month. So now you're holding at $4650 a month in payments.

Closing costs can be around $20k depending on where you live. This includes a bank fee, mtge tax, title insurance, and your attorney. Your mtge broker gets paid by the bank, and that gets added to your bank fee (in some way). Many people just add the closing costs to the mtge if they don't have the money on hand. It's very important to get a "Good Faith Estimate" of fees from the bank that is lending you the money for the mtge. Make sure you look at this very closely because it will prepare you for the bank fee part of the closing costs.

Then you are going to want to clean out your house - budget at least $100 for a cleaning person or 2.

Then you will want to paint and do the floors (let's say). If you are in NYC and get this for cheap (like I did) then maybe it's $5k each? Then you might want to buy some furniture? I would say that's the basics.

Now if you are buying an old house (like I did) and the previous owner lived in Florida all winter and at the shore all summer and only actually inhabited the house for 4 months a year, then you might count on the following things expiring within a few years - washing machine, dryer, oven, stove ... other less lucky people also had the boiler and/or roof which we did not have.

Then you're up and running.
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amother
Blue


 

Post Thu, May 28 2015, 6:30 pm
We bought our house-regular sale..our xtra expenses in the first year/two..we had to repave the side walk..seal around the house after our house was renovated ...mold started to grow on the new wall..apparently water s coming in from the side. The heating system is broken the a/c central air system never works right..we keep replacing parts.. The new tiles they put in in the kitchen are cracked...we need to replace those. There is water leaking between he extension and old part of the house...roof has to be patched...new paint has to be repainted...w also put in a new alarm system..cost 3 grand. The windows weren't put in right so most don't open properly, we had to get a guy to fix it.
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octopus




 
 
    
 

Post Thu, May 28 2015, 8:25 pm
don't forget at least 10 grand for closing costs.
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amother
Orange


 

Post Thu, May 28 2015, 9:06 pm
Now if you are buying an old house (like I did) and the previous owner lived in Florida all winter and at the shore all summer and only actually inhabited the house for 4 months a year, then you might count on the following things expiring within a few years - washing machine, dryer, oven, stove ... other less lucky people also had the boiler and/or roof which we did not have.

Then you're up and running.[/quote]


... and they didn't keep their gutters in good shape, or maintain their yard, and the sump pump needs a back up battery, and the electrics have a variety of handyman specials to pull up to code (that the inspector didn't notice and the city ignored)
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amother
Powderblue


 

Post Thu, May 28 2015, 9:50 pm
amother wrote:
Now if you are buying an old house (like I did) and the previous owner lived in Florida all winter and at the shore all summer and only actually inhabited the house for 4 months a year, then you might count on the following things expiring within a few years - washing machine, dryer, oven, stove ... other less lucky people also had the boiler and/or roof which we did not have.

Then you're up and running.


... and they didn't keep their gutters in good shape, or maintain their yard, and the sump pump needs a back up battery, and the electrics have a variety of handyman specials to pull up to code (that the inspector didn't notice and the city ignored)[/quote]

And they had termites years ago, so that when the inspector checked he didn't find evidence of live termites (that's another small fee OP, an inspector) but when you opened part of a wall you saw that the beams were toothpicks so you had to redo the entire wall.

Old houses just need tons and tons of maintenance. It takes time to learn all a house's "quirks" (the specific places it might leak for example) and the owners won't tell you this upfront because then you'll try to renegotiate price.

The first winter in our house an ice dam built up on the roof and we had water dripping into our bedroom all night long!

Every few months it's something else. That is the real hidden expense of buying a house.
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amother
Denim


 

Post Thu, May 28 2015, 10:00 pm
mezuzas for a whole house, window shades, door mats/bath mats

that comes out to a few thousand dollars that we did not have left after buying the house.
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causemommysaid




 
 
    
 

Post Thu, May 28 2015, 10:17 pm
after down payment, closing costs, and moving costs budget an extra 7-10 thousand just in case.

You will be surprised at how badly you under budgeted the costs of home ownership.
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Iymnok




 
 
    
 

Post Fri, May 29 2015, 3:39 am
-Go through every part of the house, guess the soonest it will need replacement/repair/maintenance add all those costs together.
-Figure out what basic furniture you will need (that you don't have already)
-Moving costs
-Costs in legally moving. Changing your address on documents and accounts, phone company,
-Insurance
-Possibly higher utility bills
-Landscaping
-Transportation costs if it's farther from schools, work and shopping.
-Taxes, is it in another state or district with higher or different taxes?

Plus all the fees, costs and taxes directly relating to the home purchase.

I'd make a calendar of the expenses per month to clarify my budget.
Educate yourself in all the possible financial aspects to avoid surprises and possibly come out ahead.
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nyer1




 
 
    
 

Post Fri, May 29 2015, 1:55 pm
um. I don't really think anything is a HIDDEN fee. you get a good faith estimate during the loan application process which pretty much spells out based on what you are putting down and the interest rate what you will be paying. hopefully you already know the property tax amount you will owe per year before you even put in an offer for the property in the first place. I mean, wouldn't it be silly to buy a nice affordable 300k house only to realize you can't afford the 20k per year in taxes?
also, before you actually move in, don't you have an appraisal and inspection to pretty much know if any repairs are necessary? u should also have plenty in the bank after everything to cover those unexpected expenses that could come up down the line -- broken heater, appliances etc. but as far as furnishing, mezuzas, painting, redoing the floors, either you decide you are going to do all these things at once, or u can do it gradually so it doesn't hurt so bad financially. u can also get quotes from the movers before you move so that you know if you want to use the movers for everything or if u want to use a mover just for the big stuff and have friends help you with the rest.

so, in summation, you have some control over what money you will need to pay. you will see all closing costs and monthly payments ahead of time. you should know your attorney fee before proceeding with anything. u can decide how much you want to fix over. u can get estimates for any work being done. you can fix up things gradually, if they aren't emergencies. but should there be an emergency 1 month or a year down the line, just make sure u aren't putting ALL OF YOUR MONEY into the house so that you can't afford a big roof repair or the like.
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amother
Puce


 

Post Fri, May 29 2015, 2:35 pm
Oh yeah--water damage because of ice dams, water damage because of drain problems (caused mold inside walls too), lots of money for unplanned landscaping to save the trees that make the lot desirable. Woodpeckers attacking the carpenter bees --both left wood damage. Lightening hit the house and blew out some stuff ( get a whole house surge protector wired in--it saved us this last year )

Anonymous because I've shared all these adventures
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Sake




 
 
    
 

Post Sat, May 30 2015, 11:21 am
Make sure to look at utility bills over a whole year.

Lawnmower, brooms, shovel, snow blower, flowers, more furniture..
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shooting star




 
 
    
 

Post Fri, Jun 05 2015, 3:06 pm
I find that repairs and maintenance can be a real money pit and the extent of issues can be hidden until you move in. Even with a house inspector.

For our current house there were a few unexpected expenses such as:


    Dead tree removal. It was before the trees were budding when we bought so we didn't know the tree was dead.

    Fence repair. The gate had the wrong hinges on it and it broke. House inspector didn't catch that.

    New central vac. It died just a few months after we moved in.



Our last house was a big reno project. When we bought it we thought we had more time but it turned out that we did not. Our kitchen cupboards couldn't be fixed anymore and the master bathroom leaked into the front hall. Cost us about 100k over 4 years but we made money when we sold to it was a trade-off.

Window and roof replacements a typically expensive repairs that need to be done on time in order to prevent further damage. I wouldn't say they are hidden though, just more expensive than you might think.

Foundation issues can be hidden in either a new house or resale but thankfully we've never had that. My parents had a house bought new for about 18 years and suspected foundation issues (with the garage). They had it inspected and nothing turned up. Sure enough, a few years after they moved out there was a foundation issue with the room above the garage and we could see where the bricks had been repaired.
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