Anticipating the Costs of Owning a Home
Understanding the costs that come with owning a home is an essential part of your homeownership plan. You have the down payment ready, you’re prepared for the monthly mortgage payments, and you’ve reserved a moving truck for the big day. What other expenses can you expect after signing on the dotted line?
Closing costs are one-time fees charged by the lender that you pay when you sign the closing documents for your home purchase. The fees vary by state and lender, but are typically between 2 and 5 percent of the home’s purchase price.
You will pay a percentage of your home’s assessed value in property taxes. These taxes fund local emergency services, public education, and road construction. Be sure to ask your Real Estate Agent about the local property tax rates to help budget appropriately.
Your Homeowners Insurance premium is calculated on the value of your home, where your home is located, and the type of coverage you choose. Research the agencies and coverage types available in your area so you can make an informed decision.
Utilities and Services
Be sure to take in to account monthly bills like the cost of water or garbage pickup. It’s a good idea to take energy costs into consideration, too. If you’re purchasing a new home, your Sales Consultant can discuss the typical energy usage expected with your floor plan. Older homes, which often have less insulation or an aging air conditioning systems, tend to be less energy-efficient and can surprise first-time Homeowners. You should also be prepared for an increased utility bill if watering the lawn is going to be a new part of your to-do list.
Maintenance and Repairs
It’s important to prepare for the routine costs and surprise expenses of keeping your home in good order. Lawn and garden upkeep can mean hiring professionals or taking the DIY approach. Have a plan in place to pay for emergency repairs to your home’s roof, plumbing, air conditioning and appliances.
Homeowners Association Dues
Some communities feature shared spaces and deed restrictions to uphold property values. These communities require monthly dues from Homeowners to maintain those amenities and standards. Ask your Real Estate Agent about HOAs in the communities you visit.
Whether you’re a first-time buyer or ready to find a larger home for your growing family, it’s always a good idea to consider all of the costs associated with homeownership.