Getting ready to buy your dream home can be an exhilarating ride there are plenty of hidden costs that can make that journey miserable if you're not prepared. If you're planning to make a move this year, here are the top 10 hidden costs you should budget and save for when buying a home in Rochester, NY!
1. Property Taxes
While you may have accounted for your mortgage payments, property taxes can be a substantial and sometimes overlooked expense. New York State, in general, is known for having relatively high property tax rates but a lot of buyers can experience sticker shock when it comes to Rochester's tax burden. It's important to factor property taxes into your budget and also to remember they aren't going to stay the same forever.
A question I like to ask my clients is "if the city reassessed this home tomorrow and the taxes went up by XX%, would this house still make sense for your budget?"
2. Homeowners Association (HOA) Fees
For those eyeing properties in planned communities or condominiums, HOA fees can come as an unexpected addition. These fees contribute to the upkeep of shared spaces and amenities, so it's crucial to factor them into your monthly expenses.
3. Utility Bills
Rochester has some rough Winters so you're going to want a warm and cozy home to make it through the snowy months. Those heating and electricity bills can add up. The cost of utilities can vary significantly depending on the size and age of the home. If you're looking at older homes, they may lack energy-efficient features and you're more than likely going to have higher utility bills. It's wise to inquire about past utility costs to estimate your ongoing expenses accurately.
4. Home Maintenance and Repairs
Rochester is filled with fantastic older homes but underneath their charm lies the potential for maintenance and repair costs. Rochester's seasonal weather can take a toll on properties, making it essential to set aside funds for unexpected fixes or routine maintenance tasks. A common rule of thumb for budgeting for regular home maintenance and repairs is to set aside approximately 1% to 3% of your home's purchase price annually. This estimate helps cover ongoing maintenance tasks and prepares for unexpected repairs.
5. Private Mortgage Insurance (PMI)
For buyers with a down payment of less than 20%, PMI is often required. This additional cost is designed to protect the lender in case of default and can add a significant expense to your monthly mortgage payment.
6. Closing Costs
While some closing costs are expected, it's crucial to account for all potential fees, including appraisal fees, title insurance, and attorney fees. Your real estate agent and lender should provide you with a comprehensive breakdown of all of the fees.
7. Home Inspection Costs
Investing in a thorough home inspection is a wise decision but you as the buyer could be stuck with the bill. Remember to shop around and include inspection costs in your budget to avoid financial surprises.
8. Moving Expenses
The process of moving itself can be a hidden cost that many overlook. Whether hiring professional movers or renting a truck, factor in the expenses associated with transporting your belongings to your new home.
9. Insurance Premiums
Securing homeowners insurance is a non-negotiable aspect of homebuying. However, premiums can vary based on factors such as the home's location, age, and specific coverage needs. Obtain quotes early in the process to anticipate these ongoing costs.
10. Home Appraisal Fees
Home appraisal fees are a standard cost incurred during the mortgage process, and typically range from $300 to $500 or more. It's a necessary step in securing a mortgage so get ready to see that added to your bill.
As you set your sights on homeownership in Rochester, NY, staying informed about these hidden costs is your key to a smooth and financially sound real estate journey. Partnering with a knowledgeable local real estate agent can be invaluable in navigating the intricacies of the local market and ensuring that your dream home doesn't come with unexpected financial burdens. Happy house hunting!
