Purchasing a home is one of the most exciting times in a person’s life. However, without planning ahead for the costs associated with home ownership, buyer’s remorse can quickly set in. Below are the top eight costs to consider when purchasing a home.
Purchasing Costs – The cost of owning a home begins long before you ever move in. Your first items to budget for include a down payment, closing costs, application and origination fees, and any discount points you may choose to purchase.
Moving Costs – Once the papers are signed, it is time to begin planning your move. The cost of moving can vary dramatically depending on where you are moving to, how far away you are moving, and how much stuff you plan to bring with you.
Mortgage – For most homeowners, a monthly mortgage payment will be a bill you will be paying for the next 30 years. This payment must be accounted for as one of your top line items in your budget.
Property Taxes – Most people have their mortgage company collect payments for property taxes. Depending on where you live, property taxes can range from .28% to as high as 2.49%. Budget accordingly, especially if you will be saving on your own to pay the tax.
Utilities – This one seems obvious, but unlike renting, you will have to pay for most of your utilities separately including power, water, sewer, garbage collection, phone, lawn, and internet. Also, don’t forget to include entertainment which can include cable or streaming services.
Association Dues – If you purchase a home which is a part of an association, expect to pay monthly, quarterly, or annual dues. In some circumstances, you may be subject to your local association fees and fees for a master association.
Maintenance and Repair – A house is a building for which you are the manager. The costs to maintain and repair a home often sneak up on new homeowners. Appliances require routine check-ups, filters need to be replaced, roofs need inspecting or replacement, just to name a few. Create a reserve fund to save for both expected and unexpected home operation costs.
Insurance – There are few, very rare exceptions when you may not purchase homeowners’ insurance. Depending on where you live, homeowners’ insurance premiums can vary widely and in catastrophe-prone areas, can change dramatically after an event.
While most of these costs are fixed and out of your control, insurance costs can vary based on the options and coverage you select. Connect with us to go over your homeowners’ insurance requirements to make sure you have the right coverage for your needs.