The Hidden costs of home ownership

As you embark on the exciting journey of purchasing your dream home, it's important to be aware of the not-so-obvious expenses that come with home ownership. Besides coming up with the deposit and then the monthly mortgage, there are some hidden costs that may catch you by surprise. Let's take a look at some of these hidden costs to make sure you’re well-prepared for the full picture of home ownership.

Extra Closing Costs

Closing costs are often overlooked during the excitement of home buying. These include fees for services like legal fees, loan fees, building inspections, and LIM and title searches. You will also be likely up for an apportionment of the regional and local rates. Moving costs and cleaning costs are also something to budget depending on the property and location. Be sure to budget for these costs, as they can add up and catch you off guard if not accounted for in your financial plan.

Home Maintenance and Repairs

Owning a home comes with the responsibility of maintenance and repairs and at some stage, something is going to need to be fixed or upgraded. Whether it's a leaky roof, a malfunctioning heating system, or a plumbing surprise, these unexpected issues can dent your budget. It's wise to set aside a portion of your income for routine maintenance and establish an emergency fund for those unforeseen repair moments.

Corporate Body Fees

If your new abode is part of a complex or apartment building, then be prepared for corporate body fees. These fees contribute to the upkeep of common areas, amenities, and community services, and while they provide valuable benefits, they can be reasonably costly. It's crucial to factor them into your budget from the get-go.

Utilities

While utilities are a common expense, first-time home owners might overlook the potential increase in costs. A larger space typically means higher utility bills for things such as electricity, gas, and internet. Consider the energy efficiency of your home and if there are any areas you can improve this (especially for the Central Otago winter!). Ensure you include utilities in your financial planning or budget, and be sure to increase the budgeted cost of things like electricity and gas in winter when usage goes up. 

Insurance Premiums

Home owners insurance is a must to safeguard your investment against unforeseen events, and some banks won’t lend without it. However, the cost of insurance can vary, and it's essential to explore different options. Don't just settle for the first quote you receive; shop around to find the best coverage that fits your needs and budget. For mortgage protection, income protection and health insurance, be sure to reach out to our Insurance Advisor Allanah Greer. 

Congrats on starting on the exciting journey of home ownership! Being aware of these hidden costs is key to a smooth and financially sound experience, and allows you to better plan to avoid additional stress. It's imporantant to note that by using a mortgage advisor, we can help you negotiate up to 0.80% of your lending as a cash contribution, which is usually used towards offsetting some of the costs associated with purchasing a property. Here at Loan Market Queenstown, we're here to guide you through every step of the home buying process, ensuring you're well-informed and confident in your decisions. If you have any questions or need personalised advice, feel free to reach out. Happy home buying!