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September 15th, 2020

Planning for the Hidden Costs of Owning a House

Often a financial goal of new clients and often they are forgetting to include all the costs of buying a home.  However, there are a lot of things to know before buying a house.

Buying a house can be a great move financially and emotionally. 

In the best financial scenario, the house locks your children into good school districts and keeps your housing expense stable as well as affordable.  Additionally, the emotional impact of staying put in a house increases the stability of home life as compared to moving from house to house to house each year.

When creating your financial plan, do not forget to include these costs:
  • Furnishing your new home – typically people move into larger homes and want to immediately fill the dead space.  Not factoring in this expense can lead to increased credit card bills and in the worst case, credit card debt.
  • Home maintenance – landscaping, lawn care, termite bonds, interior and exterior painting, HVAC, etc.  Not maintaining your home can lead to drastically increased expenses down the road.  Do not forget about the costs and time needed when maintaining a bigger house or a new yard.
  • The cost of selling your house – on average, real estate brokers will charge 5-6% to sell your house.  Depending on the housing market as well as the financing of your house, it can take years to recoup the expenses listed above plus the cost of then selling the house.  Buying with a short timeframe can reduce your potential of making money on the sale of your house.  

Putting a proper financial plan together prior to shopping for a new house should be a must do for every homebuyer.

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