If you’re sick of renting, you might be considering a home purchase. After all, mortgages tend to be cheaper than paying rent — so why doesn’t everyone just stop renting and buy a home? The truth is that buying a house isn’t just a matter of paying the mortgage every month. There are all kinds of hidden fees for buying a home. Today we’ll help you sort them all out.
One of the top pros of homeownership, among many, is the fact that mortgage payments are often much less expensive than rent. However, just because a mortgage payment is less than your current rent does not necessarily mean that buying a home would be cheaper. There are numerous costs other than closing costs to consider when deciding to buy a new home.
Inspection Costs
If you are buying an old house (one that had previous homeowners) it is important to get someone to do an inspection before you move in. Reason being, there could be an issue with the structure of the house, the house could be infested by pests, and there could be other problems you might not see on your own.
When you get an expert to do the inspection, you will have peace of mind when you decide to move or rent out the place. Although, some Kenyans ignore the need for inspection leading to future problems.
Stamp Duty Fees
This is basically tax which is applied on property documents when you’re either buying or selling a house. In Kenya, the Ministry of Lands and The Kenya Revenue Authority(KRA) determines what the stamp duty rates are.
The amount of stamp duty paid depends on the location and price of the house. The more the property is worth, the higher you pay. For the transfer of immovable property in urban areas, the stamp duty rate is 4% while that in rural areas is 2%.
Mortgage Application Fees
Most potential home buyers will take a loan to finance it. Once you get the loan, you are charged an application fee which is usually non-refundable even if the mortgage doesn’t go through.
However, you need to clarify with your lender whether this fee is mandatory. Some lenders will waive this fee under certain circumstances. It doesn’t hurt to ask.
Legal and Conveyancing Fees
It is normal to buy a house on your own without seeking help from a lawyer. However, it becomes an added cost if you don’t go through the process correctly. You would rather budget for a conveyancer who will help you understand what you need to pay for and avoid getting conned or scammed by people who take advantage of first-time home buyers.
Moving Costs
Most people put their main focus on the cost of the house and forget about budgeting for the actual move. Once you successfully buy the house, you will need money for the actual move i.e. packing and hiring the moving truck.
Before hiring quality movers, you should research different moving companies to get different quotations before settling on one. Read online reviews to see what other people are saying about the companies you have in mind. Friends can also recommend you to certain moving companies. Apart from the moving costs, this moving checklist can help make the moving process a little less stressful.
Related: Moving Tips For First Time Home Owners
Utility Costs
If you are moving from renting to your new home, your utility bills are going to increase. You also would want to be as comfortable in your new home as you were in your other one. Are you used to having an internet connection in your house? Now that you have moved, you might have to get a technician to drill holes on your wall to install your internet. This comes at an added cost.
Some of the utility costs you need to keep in mind are water, gas, electricity, internet, and garbage. These are monthly charges, however, setting them up is an added cost.
Think Ahead
The only way to avoid these hidden fees when buying a house is to plan beforehand. The only way to do this is to research extensively on what you will need and budget accordingly. You could find a cheap house in terms of the sale price but the hidden fees when buying a house will leave a deep cut in your pocket. Buying a house becomes less stressful when you know what to expect.
