When preparing for buying a house, many potential homebuyers only look at what the difference will be between their rent and new mortgage payment. There are many other expenses that come along with being a homeowner. Here’s a look at the hidden costs of homeownership.
Property Taxes & Homeowner’s Insurance
These are two of the biggest costs you can associate with buying a house. Most lenders now require you to include your property taxes and homeowner’s insurance in your mortgage payment. These are escrow payments. Each month your taxes and insurance add up to your principal and interest payment. Your lender will handle paying these bills out of the escrow account. Hopefully, your mortgage payment is more affordable than renting even with property taxes and insurance factored in.
This is not a cost for all homeowners. It depends on the area you buy a property in. Many homeowners now have to pay homeowner’s association fees. What these fees cover will differ between every association but may include snow removal, landscaping, sewer and trash fees, access to community pools, tennis courts, and playgrounds. Pay attention or even become involved with the association to assure that your money is being allocated properly.
Above all, trying to figure out how much it will costs to heat and cool your new home can be tricky. As a rule, speak with your realtor about what the costs may be for a home your size. Factor this new amount into your monthly budget.
If there’s one thing certain in costs of homeownership- it is maintaining your home. Like anything else you own, you must take care of it and keep it updated. There is no shortage of things you’ll need to maintain in your home. I recommend that homeowners save 1% of their home’s value each year into an account specified for just home repairs. This will help you to have money set aside when you need to replace the roof or repair a hot water heater. Big expenses won’t intimidate you because you’ve been preparing for them.
All of these items should be factored into the true costs of homeownership. Owning a home is definitely worthwhile. Although it may cost more than renting, you are usually getting a nicer or bigger home in comparison to what you’d pay in rent. Additionally each month you make a mortgage payment you are investing further into the property. You may see a great return on investment if you buy and sell at the right times.
Contact Aceland Mortgage if you are worried about getting a good deal.