This article is presented by Chase. The views and opinions presented are those of Everything Finance.
Most people agree that spring offers an optimal window for buying or selling homes. The advocacy for the spring home buying season stems from practical circumstances and long-held misconceptions about the market. During spring, many individuals are eager to explore outdoors after a long winter, which coincides conveniently with moving plans within the same school calendar.
Commendably, a Chase survey showed that a significant number of Americans plan to dive into the home buying arena this summer. But how well are they versed in deciphering mortgage figures?
Interest rates hit 4% for the first time since November 2014, stirring speculations of a continuous increase. Hence, this might be a perfect time to invest for those looking to save. The math doesn’t lie: an average US mortgage taken on a 4% vs. 5% interest rate results in nearly $60,000 savings across 30 years!
While interest rates are paramount, many prospective homebuyers overlook additional costs. These include home inspection charges, which are necessary to avoid investing in a defective property, and property survey costs mandated by lenders. Additionally, don’t forget to budget for upfront tax payments at closing.
Several fees also need to be taken into account at closing. These include government recording charges, appraisal fees, credit report fees, title services and lender’s title insurance, flood life of the loan fee, tax service fee, and a lender’s origination fee.
Other considerations include homeowners’ association dues, insurance costs, closing costs, and potential home improvements and furnishings expenses.
Moving homes can also come with significant expenses relative to packing, storage, and transportation of belongings. Cross-country moves particularly escalate these costs. Even a local move may rack up unplanned costs for truck rental, moving services, and equipment.
Remember to include costs for setting up utilities including phone, electricity, gas, and water, which can all add up especially when moving to a larger house or from a rental property. You may also need to purchase new furniture or appliances for your new home. Upsizing comes with the exciting, yet financially challenging task of making the space homely.
Ensure to budget for ongoing maintenance and potential renovation costs, such as painting, roof shingles replacement, plumbing, and wiring repairs. Standard practice suggests that you save 1% of your home’s purchase price annually for these costs, which may also vary based on the building’s age, the previous owner’s maintenance, and the local climate.
Thankfully, Chase offers a plethora of resources for potential home buyers. For more information on home buying and mortgage calculators, visit chase.com/homebuyers. You can also find useful videos on the Chase YouTube channel.
