Santa Cruz Real Estate News & Information

So, you’ve found a home you love, at a good price and you’ve even managed to cobble together a down payment.

That’s it, right? Just look after the monthly mortgage payments and enjoy life as a Santa Cruz home owner.

Not quite.

Although the monthly mortgage payment will likely be your largest monthly expenditure, it won’t be the only one. Each step of home buying and home ownership comes with a number of hidden costs that may come as a surprise to the uninitiated.

Have no fear. In the spirit of preparing you, take a look at our run through of the hidden costs of home ownership. Arm yourself with the right information and you won’t surprised when extra costs crop up.

Before You Close

Don’t be surprised when costs arise even before you’ve closed on a property. This is pretty common.

Earnest money is like a deposit that many sellers require as a sign of good faith. It’s a way you can demonstrate that you are a serious buyer and is normally 3% of the purchase price which is counted as part of your down payment.

Also while not a requirement, having a home inspection completed before closing can save you a lot of headache down the road, and potentially get you out of a bad situation. Typically, a home inspection can be completed after an offer is made, but before you actually close on a home.

Hiring a home inspector will run you between $400 and $500.

The Closing Costs

You’ve almost certainly heard of the down payment, but unfortunately the upfront costs of home ownership paid out during the closing period go above and beyond this value.

There are all kinds of costs associated with the professionals you’ll need to hire to take care of various aspects of closing on a home. This can include lawyer fees, land transfer taxes and notories. It’s estimated that all told, these closing fees can amount to 5-6% of the total value of the home you want to buy.

There are few shortcuts here. If you want to ensure a smooth transition of home ownership from buyer to seller, these fees are an absolute necessity.

Regular Costs & Maintenance

Once you’ve closed on a home, those fees are hardly the last of it. Regular costs will be required to manage your property and insure your new home, not to mention taxes.

Property taxes are often lumped in with your monthly mortgage payment, so they can be easy to overlook. When working out what your monthly mortgage payments will be, it’ll be important to consider your property taxes as well.

Regular maintenance is also something worth considering. These costs can vary quite widely depending on the size and layout of your property. A home with a large yard for instance could bring with it significant maintenance costs, while a unit in a condo development could be much less.

Condo developments often share the costs of maintenance between its owner / members. This comes in the form of strata or condo owners fees. For many, it’s a good compromise - you’ll pay a set amount each month, and the condo will take care of the maintenance of common areas.

The amount of service included as part of condo fees can vary widely from development to development, so it’s important to know what you’re paying for and if it makes sense for you.

Important Questions to Ask Yourself

Don’t get us wrong. Home ownership is a great move for a large number of people. It’s a very solid investment that is almost certain to grow in value and offer lot of stability.

We just want to make sure that you know exactly what you’re getting in to, so no surprises spring up when you least expect it.

We’d suggest asking yourself a few important questions and carefully consider how you’d answer them.

Do you have money set aside for a down payment and associated closing costs?

Do you plan to live this home for the next 5 years?

Can you afford the regular maintenance costs associated with home ownership as well a monthly mortgage payment?

Please let us know if you'd like to know more about what these fees mean & if you're ready for home ownership. You can contact Lauren Spencer online or call 1.800.226.4717.