Buying a house in Eugene can be a pretty pricey proposition – one that can impact you financially for many years to come. Obviously, there will be the down payment and the mortgage, but there are actually many more expenses home buyers should plan for. Statistics show that homeowners across the country spend more than $9,000 every year on these “hidden” costs. You don’t want to find out after you close, that all the unexpected costs have actually put the home out of your price range. So let’s take a look at 7 expenses to plan for when buying a house in Eugene.
1. Closing Costs
Most people buying a house in Eugene are aware that there will be closing costs, but they often aren’t aware of the extent of these costs. Just some of these many costs are:
- Lender application fees
- Mortgage taxes
- Attorney fees
- Title insurance
- Recording fees
Typically, the total closing costs will amount to around 2% to 5% of the total cost of the home – which is a pretty sizable chunk of change.
2. Property Taxes
Property taxes can vary widely, from fairly negligible to financially burdensome, depending on the state and specific area and neighborhood. And this means the property tax is one of the top expenses to plan for when buying a house in Eugene. Further, property taxes aren’t static – they can always (and often do) increase from the year to year. So before buying a house in Eugene, be sure to check with your local real estate agent to find out more about property taxes. (You can do that by calling 541-249-5990.)
3. Maintenance Costs
Even if you are buying a newly constructed house in Eugene, you will most likely have maintenance costs before very long. Real estate pros advise planning on “paying 1 to 2 percent of the value of your home every year in maintenance and upkeep.” Some of the most common maintenance tasks you’ll have to pay for include landscaping and lawn upkeep, painting, gutter cleaning, pressure washing, and HVAC maintenance. Again, your local agent can help you assess what your maintenance costs will be when buying a house in Eugene.
4. Utility Bills
Many people probably wouldn’t consider utility bills one of the expenses to plan for when buying a house in Eugene, but they should. Paying for utilities is in fact a cost of homeownership. In some areas, what you pay for utilities can be as high as your property taxes. Of course, utility bills will vary from region to region, depending on the climate, but the “national average is $2,964″ – certainly nothing to sneeze at.
5. Private Mortgage Insurance
Many home buyers just don’t have enough cash on hand to pay 20% down when buying a house in Eugene. So most of the time they wind up having to pay for private mortgage insurance in order to purchase a home with a lower down payment. And this private mortgage insurance can be as much as 2% of the loan amount.
Private mortgage insurance provides a way for lenders to protect their investment in case of default. Usually, the private mortgage insurance payment is figured into the monthly mortgage payment until “the remaining principal balance dips below 80% of the home’s value,” at which point buyers may no longer have to pay for this insurance. So if you can’t pay 20% down, you should be aware that you may have this additional expense.
6. HOA (and Similar) Fees
Many condos and newer homes in developments have a homeowner’s association (HOA), and if you buy such a home, you will likely have to pay HOA fees every year. This is definitely one of the expenses to plan for when buying a house in Eugene, especially if you’re buying in an upscale area. According to real estate experts, in “pricey urban areas, condo assessments can rival mortgage payments, so pay close attention to those costs before buying.”
7. Agent Commission
The final one of our expenses to plan for when buying a house in Eugene is your real estate agent’s commission. The typical commission is 6% of the purchase price, usually split equally between the seller’s agent and buyer’s agent. And often commissions are negotiable. Although buyers don’t have to pay the commission (rather the seller), the fact that there will be a commission can increase the price of the home. But if you consider the many benefits of hiring an agent, this really isn’t an expense – rather, it is a small fee that results in big savings. Most of the time, your agent will help you save a substantial amount by negotiating a better deal. And, as we mentioned, your local agent can help you understand all these “hidden” expenses.