Added Costs Of Homeownership That You Need To Factor In
Buying a home is likely going to be one of the biggest financial transaction of your life. Here are some added costs that you need to consider before jumping into homeownership. And some advice on how to stay on track with your budget.
Surprise Maintenance Costs
Like a car, every home will have maintenance costs. You will need to spend money to upkeep both the inside and outside of your home, complete tasks such as replacing your furnace filter every few months, or recaulking areas of your bathroom to keep them watertight. Those are a given. However, what lots of homeowners don’t think of are the surprise maintenance costs. These can include things like the need to install a new roof sooner than expected. Or having to replace your windows because of a broken seal. You might also find a crack in your foundation, or be surprised with a burst pipe somewhere in your home.
Before buying a home, it’s important to have a home inspection conducted and do a visual inspection yourself as well. Unfortunately, even in those cases where you’ve done everything right, the unexpected can strike and you need to be prepared to tackle those surprises as they come.
Taxes, Insurance and More
Being a homeowner isn’t just about paying your mortgage. There are also many added costs that you might be surprised by. If you were a renter before owning, you likely didn’t have to worry about these costs. As a homeowner, they should be at the forefront of your mind.
In addition to paying your mortgage, you should also be prepared to pay property taxes, home insurance and mortgage insurance fees, and utilities such as water, natural gas and electricity. All of these things can add up quickly. If you are a first-time homebuyer looking to enter the market, we highly recommend talking to your parents and other homeowners to get a sense of average costs so that you can be prepared for all that comes your way.
Hidden Costs In Buying A Home
Right out of the gate, you need to be prepared for the additional costs of purchasing a home. These hopefully won’t be hidden costs, but unfortunately, a lot of first-time homebuyers aren’t aware of the extra costs and fees associated with buying a home. In addition to your budget for your home purchase itself, you also needed to factor in closing costs for lawyers, your real estate agent, a home inspection, etc.
In addition to the transactional costs, you will also need to budget for simple things like moving costs and small home improvements such as painting or installing new flooring. Even something as small as stocking up your cupboards and fridge can carry a surprisingly hefty expense. Our advice would be to overestimate all of your expenses so that you can come in on or even under budget and start off life in your new home on the right foot.