Owning a home is filled with wonderful opportunities. The chance to entertain, more space for your family, and being able to design and decorate a place that reflects your needs and personality are just a few of the reasons that people love owning a home. But before purchasing a place of your own, it is important to consider the costs of home ownership beyond the sale price. A mortgage will typically be a fixed cost, but it’s the less expected expenses that can disrupt even the best intentions. Below are a few of the things to consider when thinking of how much home to buy:
- Property Taxes – Taxes are an expense that home owners should expect from the very beginning. Thankfully, they are also an item that can be planned for in advance. When looking at homes, be sure to ask your Realtor what the property taxes are for every home, so that you can add that expense to your prospective budget. Taxes tend to increase regularly; keep this in mind when reviewing your annual expenses.
- Insurance – Insuring a home is crucial and necessary for all lenders. You want to select a plan that protects you financially in case of fire or another disaster. Many home insurance policies don’t cover situations like earthquakes or flooding, so if you live in an area prone to either or in a flood plain, you may need to purchase additional coverage. Similar to taxes, insurance premiums should be reviewed annually.
- Appearance – Personalizing your house is one of the most exciting things about buying a home. You will have the opportunity to make the home yours. Just be mindful that all of this comes with a cost.
- Pest Control – When renting, any pest invasion was covered by the landlord. As a homeowner, those expenses now become your responsibility.
- Maintenance – Whether it is plumbing, sealing the driveway, or cleaning the gutters, there are maintenance issues that need to figure into your budget too. Some of the items you encounter are relatively inexpensive, while others could be quite costly.
- Furnace and Air-Conditioning – One of the more costly items in your home is your furnace and air-conditioner. Unless you have a newer system in your home and a warrantee, there are few guarantees. Changing filters regularly and keeping up with routine maintenance can help prevent bigger issues, but it is still best to save some money each month so that you are prepared when a repair or replacement is needed.
- Wiring – Even if you were renting previously, cable, phone, and Internet were likely already part of your monthly expenses. What may be unexpected for new homeowners is that if you’re experiencing connection issues you might have to foot the bill. In most cases, the wires outside of the home are the utility company’s responsibility, but the wires inside the home are your responsibility.
- Hidden Maintenance Costs – A common tale of homeowners is that they bring in a professional to fix a problem they knew about, only for him to find the issue was bigger or an entirely new issue that the owner didn’t know existed. These hidden costs are surprising, which makes emergency savings all that much more important.
- Savings – It’s likely you’ve heard the expression, “it takes money to make money.” In this case, it may take money to save money. Items like new windows, energy efficient appliances, and programmable thermostats can do wonders to cut utility expenses, but all of these items come with an upfront cost when installed.
- Time – The biggest cost to any homeowner is their time. Maintaining and personalizing a home takes time, so be sure to “budget” for this as well.
Buying a home is an exciting time and budgeting for these unexpected expenses helps to make the process more enjoyable. If you’re considering buying a home, contact Park Avenue Properties of Colorado Springs to talk about what you’re looking for.