31 Hidden Costs You’ll Run Into When Buying A New Home

Last Updated on May 31, 2022 by Kimberly Crawford

Asking prices only tell you how much sellers want for their homes. It’s not the final price you’ll pay once everything is tacked on, so you must plan accordingly. Maybe you shouldn’t look at homes over a certain price.

You don’t want too much debt, which could wreak havoc on your life. Let’s look at some hidden costs you must keep an eye on. You’ll feel more confident about bidding on homes once you educate yourself.

1. Paying All Your Taxes

It’s impossible to escape the government when buying a new home. The exact taxes you pay will depend on where you live. Sometimes you can use a convenient and easy to use tool – land tax transfer calculator will help.

You’ll probably pay a property tax at the moment, which could increase once you move. Some places expect you to pay a school tax, which isn’t very common. Your real estate agent will fill you in on everything.

2. Quality Home Insurance

Home insurance is a waste of money if nothing ever goes wrong, but it’s vital when it does. If you’re moving into your first home, you’ll be shocked by how much it costs. The premiums also go up when you move into a bigger house.

Luckily, it’s possible to save money if you’re smart. Just phone around different companies until you find a good deal. If you want to keep saving cash in the future, phone around every year or two for better offers.

3. Building inspection.

Before you buy a property, it is important to have a building inspection carried out by a professional. This will help to identify any hidden costs that could be associated with the property. The cost of the inspection will vary depending on the size and age of the property, but it is generally around $300-$500.

4. Buildings insurance.

It’s one of those necessary evils that comes with owning a property. But what exactly is it?

Buildings insurance is a type of insurance that covers the physical structure of your home in the event of damage. This can include damage from weather events, fire, theft, or vandalism.

The cost of buildings insurance can vary depending on a number of factors, including the value of your home, the age of your home, and the location of your home. But one thing is for sure: it’s not cheap.

The average cost of buildings insurance in the UK is £140 per year, according to MoneySuperMarket data from January 2019. However, this figure can rise to £200 or more per year for properties in high-risk areas.

The average cost of building insurance in the USA is even higher, at $1,228 per year.

5. Contents insurance.

It’s one of those things that’s easy to forget about when you’re buying a house. But if you don’t have it, you could be left out of pocket if your belongings are damaged or stolen.

Here are a few things to consider when taking out contents insurance:

– The value of your belongings. Make sure you have an up-to-date list of everything you own, including any expensive items such as jewellery or electrical goods.

– The level of cover you need. You can choose between ‘new for old’ replacement cover or ‘indemnity’ cover, which pays out an amount based on the current value of your belongings.

– Any excesses that apply. This is the amount you’ll need to pay towards any claims you make.

– The type of property you’re insuring. If you’re a tenant, your landlord is responsible for insuring the building but you’ll need to take out your own cover for your belongings.

– Whether you need any extra cover for things like pedal cycles, garden equipment or musical instruments.

6. Conveyancing and legal fees.

These are the fees charged by solicitors for handling the legal side of buying a house. The cost will vary depending on the complexity of the transaction, but you can expect to pay around $1,500 – $2,000 for a standard conveyancing service.

7. Lender’s property valuation.

When you’re buying a property, your lender will require a property valuation to assess the value of the security for their loan. This is generally conducted by a professional valuer and paid for by the borrower. The cost of the valuation depends on the value of the property being purchased but can range from $200-$600.

8. Loan application fees.

Most people don’t realize that when they go to apply for a home loan, they will have to pay a loan application fee. This is a fee charged by the lender in order to cover the cost of processing your loan application. The amount of this fee can vary depending on the lender, but it is typically around $300.

9. Mortgage registration fee.

Many people don’t realize that when they’re taking out a mortgage to buy a house, they’re also responsible for paying a mortgage registration fee. This fee is typically a few hundred dollars, but it can add up. If you’re not aware of this cost, it can come as quite a shock when you’re trying to finalize your mortgage.

Make sure to ask your lender about this fee upfront so that you can factor it into your budget. It’s just one more thing to keep in mind when you’re buying a house.

10. Ongoing loan fees.

Many people don’t realize that when they take out a mortgage to buy a home, they’re also signing up for a host of additional fees. These ongoing loan fees can add up over time and can put a strain on your budget.

Some of the most common ongoing loan fees include:

– Origination fee: This is a fee charged by the lender for processing your loan application.

– Mortgage insurance: If you put down less than 20% of the purchase price of your home, you’ll likely be required to pay mortgage insurance. This insurance protects the lender in case you default on your loan.

– Property taxes: You’ll be responsible for paying property taxes on your home. These taxes are typically paid to your local government.

– Homeowner’s insurance: Most lenders require you to carry homeowner’s insurance on your property. This insurance protects your home in case of damage or theft.

– Private mortgage insurance: If you have a government-backed loan, such as an FHA loan, you may be required to pay private mortgage insurance. This insurance protects the lender in case you default on your loan.

11. Stamp duty.

Stamp duty is a tax that is levied on certain legal documents. In most cases, stamp duty is charged on the transfer of property, such as a house or land. The amount of stamp duty you will need to pay depends on the value of the property being transferred.

When you buy a property, you will usually need to pay stamp duty within 30 days of the sale being finalised. If you don’t pay stamp duty within this time frame, you may be liable for a late payment penalty.

The amount of stamp duty you need to pay can vary depending on the value of the property and whether it is your main residence or an investment property. For example, in NSW, the stamp duty on a $500,000 property would be $17,490 for a main residence or $24,990 for an investment property.

12. Higher Utility Payments

What happens if you miss one mortgage payment? You’ll have a little time to pay up, but you won’t lose power in your home. If you move into a bigger home, you must be able to afford essential utilities.

An extra bedroom doesn’t seem like it will affect your energy bills, but it will if you turn it into a home office. A swimming pool will wipe out a large chunk of your income, especially if you live somewhere cold.

13. Maintenance And Repairs

You’ll probably need to carry out some repairs when you move into a new home. The odds of everything being perfect are very low. If you want to paint the walls or replace old cabinets, you’ll also need money for improvements.

It’s worth looking after your home carefully, even if it costs money. If you fix a problem before it gets worse, it could save you thousands of dollars. Learn how to do everything yourself to save even more cash.

14. Appliances.

You might not think about them much, but they’re a necessary part of any home. And, like anything else, they come with a cost.

When you’re buying a home, it’s important to factor in the cost of appliances. Whether you’re buying new or used, you’ll need to budget for them.

The cost of appliances can vary widely. A basic refrigerator can start at around $150, while a high-end model can cost $2,000 or more. The same is true for other appliances like stoves, dishwashers, and washers and dryers.

15. Curb appeal.

buying new house

Curb appeal is the attractiveness of a property from the street. It’s what makes a first impression on home buyers and can be a major factor in whether or not they decide to buy your house.

The problem is, many homeowners don’t realize how much it costs to maintain curb appeal. Whether it’s regularly power washing your siding or painting your trim, it all adds up.

16. Deck and patio.

When you’re buying a house, there are a lot of things to think about – the mortgage, location, schools, and more. But one thing you might not be thinking about is the cost of maintaining your deck or patio.

Sure, that deck or patio might look great now, but over time it will need repairs, painting, and maybe even replacement. The costs can really add up, so be sure to factor them into your budget when you’re buying a house.

17. Driveway.

Everyone says you need one, but they don’t tell you how much they really cost. A typical driveway is about 500 square feet, which means it will cost you about $1,500 to $3,000 to have one installed.

That’s not counting the cost of materials, which can range from $50 to $100 per square foot. And don’t forget about maintenance costs. A good rule of thumb is to budget $100 per year for every 100 square feet of driveway. So, if you have a 500-square-foot driveway, you should expect to spend about $500 per year on upkeep.

18. Emergency costs.

They can include anything from repairs to the house itself, to legal fees associated with buying the property. Be sure to factor in these costs when budgeting for your new home.

You may not be able to avoid emergency costs altogether, but being prepared for them can help alleviate some of the financial stress that comes along with them. By factoring in these costs ahead of time, you can be better prepared to handle them if they do come up.

19. Flooring.

You might not think that flooring is a big deal when buying a house, but it can actually be a significant cost. Here are some things to keep in mind:

-The type of flooring you choose will affect both the initial cost and the long-term cost of ownership. Carpet, for example, is generally less expensive than hardwood but needs to be replaced more often.

-The condition of the flooring will also affect the cost. If you’re buying a fixer-upper, you’ll likely need to replace the flooring entirely.

-Installation costs can also add up, especially if you’re having custom work done. Make sure to get multiple quotes and compare prices before making a final decision.

20. Furniture.

You need it to live comfortably in your home, but it can also be a big expense. When you’re buying a house, you may not be thinking about all the furniture you’ll need to buy to fill it out. But trust us, you’ll need more than just a couch and a coffee table.

21. Home’s exterior.

When you’re buying a house, it’s important to be aware of the potential hidden costs that may not be immediately apparent. One such cost is the exterior of the home. This can include things like painting, repairs, and landscaping. While these may not be big-ticket items, they can still add up over time and end up costing you more than you bargained for.

22. Lawn and landscaping care.

You might not think that lawn and landscaping care are hidden costs of buying a house, but they can be. If you’re not careful, you could end up spending a lot of money on lawn care products and services. Here are a few things to consider:

-The cost of lawn mowers and other equipment: If you’re not careful, you could spend a lot of money on lawn care equipment. Be sure to do your research and find the best deals.

-The cost of lawn care services: If you’re not able to take care of your lawn on your own, you’ll need to hire someone to do it for you. This can be costly, so be sure to get quotes from multiple companies before making a decision.

-The cost of watering and fertilizing: Watering and fertilizing your lawn can be expensive, especially if you have a large lawn. You may want to consider investing in a sprinkler system to help reduce the cost of watering.

23. Leaf/snow removal.

It’s one of those costs that’s often overlooked when buying a home, but it can add up quickly – especially if you live in an area with a lot of trees or where winters are snowy. Be sure to factor in the cost of leaf and snow removal when budgeting for your new home.

24. Lighting.

It’s one of the most important aspects of any home, and yet it’s often one of the most overlooked. The hidden costs of lighting a home can add up quickly, and if you’re not careful, you could end up spending a lot more than you ever anticipated.

When you’re looking at houses, pay close attention to the lighting. Is it adequate? Does it provide enough light for the rooms that need it? Are there any dark corners or areas that could use more light?

In addition to considering the overall lighting of the house, you should also take a close look at the lighting fixtures themselves. Are they in good condition? Will they need to be replaced soon? Are they energy-efficient?

25. Mold.

It’s the stuff of horror movies and nightmares. And it can be hiding in your new home, just waiting to cause problems.

Mold is a type of fungus that thrives in damp, dark environments. It can cause serious respiratory problems, skin irritation, and even neurological issues. And it’s not always easy to spot.

26. Pest control.

It’s one of those things you don’t think about until you need it. And then, it’s suddenly top of mind. Whether you’re dealing with ants, mice, termites, or any other type of pests, getting rid of them can be a big challenge – and a big expense.

If you’re in the process of buying a home, you need to be aware of the potential costs of pest control. Here are a few things to keep in mind:

1. Pest infestations can lead to serious damage.

2. Pest control companies typically charge by the job, not by the hour.

3. The cost of pest control can vary widely, depending on the type of pest, the severity of the infestation, and more.

4. Do your research to find a reputable pest control company that can help you resolve your issue quickly and efficiently.

5. Be prepared to pay for multiple treatments, as some pests are difficult to get rid of completely.

27. Plumbing.

It’s one of those things you don’t think about until it goes wrong. And then, it’s all you can think about. Because when your plumbing goes bad, it can cost you a lot of money to fix.

So, if you’re thinking about buying a house, be sure to factor in the potential costs of fixing or replacing the plumbing. It might not be the most exciting part of buying a house, but it’s an important one.

Here are a few things to keep in mind when you’re considering the plumbing in your potential new home:

1. The age of the plumbing. Older homes tend to have outdated or less efficient plumbing systems. That means more potential problems and more expensive repairs.

2. The condition of the plumbing. If the plumbing is in bad shape, it will likely need to be repaired or replaced. That can be a costly endeavor.

3. The location of the plumbing. If the plumbing is located in an difficult-to-reach place, it may be more difficult (and more expensive) to repair or replace.

4. The type of plumbing. Some types of plumbing are more prone to problems than others. For example, cast iron pipes are more likely to corrode and break down over time.

5. The size of the plumbing. Smaller homes tend to have smaller plumbing systems, which means they may not be able to handle as much water flow. That can lead to problems like low water pressure or leaks.

28. Security System.

When you’re buying a house, it’s important to be aware of the potential hidden costs that can come along with your new home. A security system is one of those potential costs. Installing a security system in your new home can be a great way to deter burglars and protect your family, but it can also come with some hidden costs. Here are a few things to consider when deciding whether or not to install a security system in your new home:

1. The cost of the actual security system. This can range from a few hundred dollars for a basic system to several thousand dollars for a more comprehensive system.

2. The cost of installation. Unless you’re familiar with electrical work, you’ll likely need to hire a professional to install your security system. This can add several hundred dollars to the cost of your security system.

3. The cost of monthly monitoring. Most security systems require a monthly monitoring fee. This fee can range from $10-$30 per month, depending on the features of your system.

4. The cost of false alarms. If your security system is set off by mistake, you may be charged a false alarm fee by your security company or the police department. False alarm fees can range from $50-$200.

5. The cost of replacing lost or stolen equipment. If any of your security system equipment is lost or stolen, you’ll need to replace it. This can be costly, depending on the type of equipment that is lost or stolen.

29. Tree care.

It’s one of those things that most people don’t think about until they have to. But if you’re buying a house, it’s something you need to be aware of.

The hidden costs of tree care can add up quickly, and they’re often not covered by homeowner’s insurance. That’s why it’s important to factor in the cost of tree care when you’re budgeting for your new home.

Here are a few things to keep in mind:

1. Tree removal can be expensive. If the tree is large or located near power lines, it can cost several thousand dollars to have it removed.

2. Tree trimming is also expensive, and it’s something you’ll need to do on a regular basis. Expect to spend at least $100 per tree, per year.

3. If you have fruit trees, you’ll need to budget for the cost of harvesting and storing the fruit. This can range from a few hundred dollars for a small harvest to several thousand for a large one.

30. Window coverings.

Most people don’t think about them when they’re buying a house, but they can be a real hidden cost. The average price for a good quality window covering can be anywhere from $200 to $500 per window, and that’s not including installation! If you’re buying a home with a lot of windows, the cost of window coverings can really add up.

31. All Your Closing Costs

Real estate agents don’t work for free, so you’ll eventually need to hand over their commission. You will also need to pay for the appraisal when you’re closing. There are actually a few costs you’ll need to sort out.

Surveyance fees will be due if you get a house survey, and lawyers are usually due something. You’ll be taken through everything in advance, so your realtor won’t spring a nasty surprise on you before saying goodbye.

It’s Time To Move Into Your Home

If you have many possessions, you might need to hire a company to help you move. Once you get into your new home, you’ll finally be able to relax.