The temptation to purchase a first home can be strong, I mean…who wouldn’t love to live in a new home? It is an exciting purchase but also one that requires adequate financial planning. A mortgage payment will not be the only financial responsibility, owning a home comes with a new set of ongoing expenses.
Here are some of the extra costs of home ownership that you should budget for:
- Insurance: Almost all lenders require the buyer to show proof of homeowner’s insurance before you can get a mortgage. Insurance premiums vary depending on the size, age and location of the house. Also, if the house is located in a flood, earthquake, tsunami, or volcano zone extra money will have to be budgeted for required hazard insurance.
- Taxes: Property taxes are another type of expense that must be paid. They include state property taxes as well as county or city property taxes. Tax rates are based on the value of the home.
- Repair and Maintenance: One of the largest expenses to budget for is the repair and maintenance of a home. Some neighborhoods keep up with the outside maintenance (with added HOA dues) but the majority is the owner’s responsibility. When we speak of maintenance this includes cleaning, yard work, remodeling, pest control, and the list goes on. Repairs are also never ending, varying from small repairs like patching the walls to large repairs that may need professional assistance, like roof repairs or hurricane damage. Either way, basic maintenance and repairs must be kept up. If neglected, they could end up costing a lot more down the road.
To help prepare for owning a own home, buyers should come up with a realistic housing budget. Each budget will vary depending on the size, condition and location of the home. There is no sure way to tell an exact amount of “extra” expenses one should prepare for but hiring a good home inspector before purchasing a home can give some insight as to what the remaining life expectancy of the house’s components are. The hidden costs of owning a home can be expensive so budgeting is the best way to prepare and be sure that a home will be financially feasible. Contact Raleigh Cary Realty for all of your home buying questions.