It's important to keep the possibility in mind that you could be on the hook for other hidden homeownership expenses and plan well in advance. Here's how.
You know that buying a home is expensive. That is why you are working so hard to save up a down payment why you are shopping so carefully for the best deal on a mortgage. What you may not know, however, is that the price of the home is not the only expense you will face.
Many first-time homeowners overlook some of the most costly aspects of buying a house. And even if they are not overlooked, it is easy to minimize their impact on the family budget. If you fail to plan for these ancillary costs of homeownership, you could find that the house you worked so hard to afford is no longer affordable. Here are eight associated homeownership costs every first-time buyer needs to know about.
Utility costs – Even if you paid the utility costs for your apartment, chances are those costs will go up now that you have more space. Be sure to ask about the average monthly cost of water, electricity, and other household essentials.
Additional furniture – Moving from a small apartment to a large home will leave you with lots of space to fill, and filling that space can be an expensive proposition. Even if you find great used furniture or drive a hard bargain on a brand new couch, those additional costs could be a real budget killer.
Commuting costs – Moving to a home in the suburbs can be great, but getting to your job in the city will be more expensive going forward. Now that walking and riding your bike are no longer options, you may find yourself at the gas station far more often.
Real estate taxes – Real estate agents tout the tax-saving benefits of homeownership, but there is another side to the coin. Real estate taxes can put a real crimp in your budget, even if they are rolled into the monthly mortgage payment. Worse yet, these costs never go away. When the last mortgage payment has been made, you will still be on the hook for those annual tax payments.
Landscaping – You probably did not plant a lot of bushes around your apartment building, but things are different now that you own your own home. A single bush could cost $50 to $100, and those landscaping expenses will add up fast.
Home services – Even if you are somewhat handy, there are some things you will not be able to do on your own. The cost of those home services is easy to overlook, but you do so at your peril.
Repair costs – Now that you own the roof over your head, you cannot simply call the landlord when something goes wrong. Instead, you will be on the hook for any home repair costs, and you never know when they will arise.
Upgrades – Your home may be perfect now, but it will not stay that way. Eventually, you will want to replace those old countertops or upgrade the bathroom, and the cost of those upgrades could be higher than you think.
Buying a home can be a wonderful investment, but it is also important to understand all the costs involved. If you are buying a home for the first time, you need to budget for all the expenses, not just the cost of the monthly mortgage.