I often see posts from people who are tired of “throwing money away on rent” and want to buy a home because “the mortgage would be less than rent.” Rarely, if ever, do people take into account how much cash on hand they will need upfront between going under contract and making it to the closing table.
As my spouse and I are under contract now on our first home together, I kept a tally of our expenses for the 30 days between going under contract and closing, and wanted to share so people can see how expensive buying a home is.
Inspection: $650 Septic Inspection: $200 Mold Test: $150 Water Test (well water): $275 Appraisal: $550 Survey: $500 Elevation Survey: $225 Closing Costs: $14,000
This is $16,550 total we have spent in 30 days to purchase this house and ZERO of this is going towards the down payment or principal. If the deal had fallen through for whatever reason, we would have been out the $2,550 with nothing to show for it.
This post is simply a reminder to people that buying a home isn’t cheap. You need to have significant savings, and you can’t just compare monthly rent to monthly mortgage. There are so many more expenses that come with buying a home.
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