Homeownership comes with several expenses, but many new home buyers only think about the fees they have to face up front, such as closing costs and inspection fees. Budgeting for a home doesn’t end when the keys are in your hand. You’ll face many recurring expenses associated with owning your own home throughout your time there. Following are 6 of the most major ones.
1. Maintenance and Regular Care
Image via Flickr by Kate Ter Haar
You may not realize how much work goes into maintaining a home when you’re renting an apartment. Many tasks probably happen in between tenants so you don’t even see them. When you own a home, though, you need to take care of these matters yourself. Maintenance tasks may include:
- Appliance repair
- Annual HVAC tune-ups
- Roof care and replacement
- Flooring repair and replacement
- Carpet cleaning
- Plumbing repairs and maintenance
- Cleaning and repainting the exterior of the home
2. Landscaping and Lawn Care
As a homeowner, you need to keep up both your home and the land that it’s on. In the early days of homeownership, this usually means hiring someone for the job or investing in a lawn mower, trimmer, and other tools for lawn care. On an ongoing basis, you’ll need to cut the grass, care for any flowers or other plants you have, and keep trees trimmed back. It’s up to you whether you do these things yourself or hire a professional, but the expenses should factor in to the total cost of homeownership.
3. Insurance Expenses
Unless you’re able to pay for your home up front, your mortgage lender will need you to carry homeowners insurance. Even if you aren’t required to have this protection, it’s a wise investment. The cost of homeowner’s insurance depends on the size, age, and value of your home as well as where you’re located. If your area is at a high risk for certain natural disasters, you’ll have to pay more for protection.
4. Property Taxes
The value of your home determines what you’ll pay in property taxes. This annual cost is a necessary part of homeownership for any type of property. As of 2010, average property taxes were 1.15% of the median home value in the United States. Rates vary by state.
5. Regular Homeowner’s Association Fees
Many neighborhoods have a homeowner’s association. This is a great feature for making sure that your neighborhood is well-maintained with great curb appeal, but it comes at a price. Before buying a home, find out if there’s a homeowner’s association in the neighborhood and what the fees are. These are usually charged monthly or quarterly.
6. Utility Bills
While you typically pay utilities even in an apartment, you may find that utilities for a home are much more expensive. The larger the home, the most costly your utilities are. Features like a pool or hot tub will drastically increase what you pay for water. Many neighborhoods also charge you for trash pick-up and curbside recycling.
Consider these costs well ahead of time to make sure you know what you can afford. Only by adding these expenses in to your monthly mortgage payments can you accurately estimate the real cost of owning a home.