If you’re a first-time homebuyer in Albuquerque, you’re no doubt already aware that buying a home involves more than just a mortgage payment. There are other costs included in the process of buying a home. It's important to be aware of those costs in advance so that you can make the best decisions during the process.
Here's a helpful overview of what costs to expect when buying a home in Albuquerque.
1. Closing Costs
Closing on a mortgage is the last step in the process, often overlooked by homebuyers in terms of cost. At this stage, the loan is approved, the inspection is completed, and you are on the verge of receiving the keys to your new home.
When you complete your purchase, you will have a closing meeting where you will sign all the necessary paperwork and make payments for various costs.
The costs associated with purchasing a home encompass various elements. These include mortgage interest payments, taxes and insurance escrow payments, legal fees, lender application fees, recording fees, and title insurance.
Closing costs can average between 3-4% of the price of the home.
2. Property Taxes
When you own a home in Albuquerque, you pay property taxes. The bank doesn’t determine these. Instead, the county of Bernalillo does.
The county of Bernalillo's average effective property tax rate is 1.18% of the assessed value of your home. So for a home that costs $205,500, you would pay $2,419 per year.
3. HOA or Condo Fees
Homeowners in homeowners' associations or condo associations are required to pay a monthly or quarterly fee. This fee is used to cover various neighborhood services, including garbage collection.
The fees of an HOA can fluctuate due to potential increases or assessments for large projects, resulting in unpredictable costs.
4. Insurance
Homeowners insurance is a requirement for obtaining a mortgage loan. Typically, the premiums are already included in your monthly mortgage payment and are paid from your escrow account. This is similar to how property taxes are handled in many cases.
Premiums for homeowners insurance can increase each year, and it's important to note that standard policies usually often do not provide coverage for acts of God. Therefore, it is advisable to obtain additional insurance specifically for natural disasters.
5. Utilities
The cost of your utilities can be as much as your property taxes. In Albuquerque, the average monthly electric bill for residential customers is $144/month.
6. Appliances
When purchasing new construction or some used homes, it is important to note that appliances may not be included. This means that you will need to budget and plan accordingly to purchase these necessary items for your home.
When purchasing a new home, it is important to consider the appliances that may need to be purchased. While the seller may leave behind the dishwasher, refrigerator, stove, and possibly the microwave, it is not guaranteed. Therefore, it is advisable to budget for the purchase of a washer and dryer at the very least.
7. Landscaping
Managing your landscaping requires both time and investment in lawn equipment. However, there will inevitably be tasks that you cannot handle alone, such as removing hanging tree limbs or dead trees.
Hiring a professional for regular lawn care services transitions the expense from an occasional occurrence to a recurring monthly cost.
8. Maintenance
When you own a home, you take on the responsibility of all the maintenance tasks, which is a significant change from being a renter.
From the plumbing to the electrical wiring, a home is filled with numerous systems that require regular maintenance, occasional repairs, and, in some cases, replacement.
When purchasing an older house, it is important to consider the potential increase in maintenance costs compared to new construction. This includes maintaining the electrical system, HVAC system, roof, and plumbing.
All things considered, buying your first home in Albuquerque is the best decision you can make for your future. Making sure you have all the costs involved lined up will help make your dream a reality.
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