Buying a home should be a simple undertaking. However, purchasing a home can become complicated quickly, especially if buyers fail to consider or plan for the immediate and long-term costs associated with owning a home.
This is especially true with first-time buyers. They can be so wrapped up in the actual purchase price of the home that they sometimes fail to account the hidden costs of homeownership.
- Utilities Utilities are paramount, and the costs asscoiated need to be evaluated during the homebuying process. Utilities are often include in your rent, but now they will be your responsibilty. Heating and coolling costs, water and sewer fees, cable and electricity are going to be coming out of your pocket from now on, so it is imperative that you include them in addition to your monthly mortgage payment.
- Property Taxes Property taxes are a necessary evil. Property taxes vary by town, but will always be an additional cost when owning a home. Typically, property taxes are billed annually as a percentage of your home's assessed value. Also, property taxes will increase if you make additions or significant updates to you home.
- Home Maintenance Even a brand new house will require repairs and maintenance over time. An older home may require a new hot water heater, furnance, or roof in the near future. It is important to set money aside to cover these expenses.
- Home Insurance Insurance is probably not a cost a first-time buyer is thinking about when house hunting. The cost of home insurance will be influenced by your home's location, age and value. If you live in a flood zone or an area that is prone to natural disasters like tornadoes, landslides and hurricanes you can expect to pay extra.
This list of hidden costs associated with homeownership is not meant to discourage first-time buyers but to shed some light on expenses that need to planned for. A good Realtor will make you aware of these costs and make sure you get a home you can comfortably afford.