When you are born, you really only have a few things to fear. As you get older, your fear for things increases and you become more cautious about, well, everything.. Home ownership is no different. Buying a new home, whether it is a new construction home or an existing home, is something that you need to be cautious about. The great thing about the fears of buying a new home, is that you can educate yourself and become knowledgeable about those items.
1. Property tax increases – in North Carolina, we “escrow” your taxes. meaning that a lump sum is paid out from your insurance company yearly to cover your tax payment. You will still receive a bill when the tax come due, however, you do not pay that bill. It will be done for you. Ultimately, the bill is your responsibility to assure it is paid, so in December, you may want to call your company and double check. Property taxes are based on your homes value. Over time, as your home value increases, so can your property taxes. There may come a day that you get a letter from your bank advising you that your bill will increase. Talk to your lender to see how often the taxes are re-assessed and if there is a cap on those increases. “It also helps to know that in a down market, your homes value – and property taxes – can also decrease, and to know that your property taxes are deductible on your income tax return. So, if you do have increases, you’ll have a corresponding tax break.” – Ask Tara
2. Utilities – when you rent a home, sometimes utilities are covered as part of your rent payment. When you own a home, these are items that you need to cover separate from your mortgage payment. Items like trash, water, electricity, heating and air, cable bill and internet. These are items that can be easily forgotten when considering how much you can afford in your new mortgage payment. See if you can get a general idea of how much these items will be.
3. Unexpected repairs – there are two things you want to do when buying a home. 1) get a home inspection, read the report and ask for all major repairs to be fixed and 2) get a home warranty on your new home to help with any other items that may come up after closing. No one can predict what will come up down the road, so try to set aside some funds for emergency repairs later.
4. HOA dues – many neighborhoods in the Camp Lejeune area have Home Owners Associations (HOA). The HOA has annual fees that help cover the maintenance of private community roads, and amenities within the neighborhood. Unless it is written in an agreement, there is a possibility that these dues could increase as prices for maintenance increases. Be sure to go to the HOA meetings and hear what any proposed items may be. This will help prevent a huge surprise in the future for dues increases. Keeping close ties with your home owners in the community can also help with assuring all members keep paying their dues and don’t default. The members that default, the more likely your dues will increase to cover those that can’t pay.
5. Basic maintenance – when you buy a new home, you may over look the fact that the home doesn’t have gutters, or a storm door. These are items you can add on down the road. All homes have items that need to be bought at random, so keep this in mind as well, when you consider your financing on buying a new home.
I hope this helps ease the stress of buying a new home.. If you would like more information and to start looking at homes today, call Crystal at 910-545-2689. I look forward to assisting you in finding your new home.