5 Unexpected Costs of Homeownership
In order to be a prepared, well-informed homeowner, you need to know what the unexpected costs of homeownership are.
While many experts agree that purchasing a home continues to be a wise financial investment, there is more to owning a home than just paying the mortgage.
Check out our list of 5 unexpected costs of homeownership to be better prepared to buy your first home.
1. Property Taxes
Property taxes are determined by your location, and there isn't much you can do about this cost. As a renter, this is not something you've had to budget for, so keep it in mind as you set your budget when shopping for a home.
The average property tax rate nationwide is 1.1%, but this varies widely depending on your specific location, so be sure to do your research and ask your real estate agent about pros and cons of different cities in your potential location.
2. Repairs and Maintenance
If you've been renting up to this point, it is almost certain that any repairs or maintenance have been left up to the landlord. As you look ahead to homeownership, be mentally and financially prepared for expected maintenance and emergency repairs.
Roof
Depending on the kind of roof you have, the climate you live in, and how old the roof was when you bought the house, you may end up needing to repair or replace the roof of your house. The cost of this repair or replacement will vary greatly depending on the size of your home and the type of roof you have, but it is a cost you can fairly accurately anticipate with a little bit of research.
In many cases, you will be able to estimate when the roof will need to be replaced and how much it will cost.
Plumbing
Minor plumbing issues are par for the course, but one of the unexpected costs of homeownership is a major plumbing problem. Older homes are more likely to end up with plumbing issues, especially if they were constructed with galvanized iron water pipes that are susceptible to mineral buildup over time.
Electrical
Depending on the age of your home, your electrical system may be in need of repair during the time you own it. This is an unavoidable cost of homeownership, as faulty wiring or problems with the electrical system are potentially catastrophic.
Call in the pros for any electrical repairs; this isn't something you want to DIY.
HVAC
Homeowners should have their HVAC systems inspected annually, with the understanding that these systems are not expected to last forever. Routine maintenance costs, like inspections and cleanings, should be factored into your housing budget.
3. HOA Fees
If you buy a home in a community with an HOA, your HOA fees will be one of the costs of homeownership that may fluctuate over time. Before purchasing a home with an HOA, find out what the fees are and whether they are allowed to go up at the discretion of the HOA.
Decide whether the amenities offered by the HOA are worth the price you will pay. In many cases, they are, but this is a cost of homeownership you don't want to overlook.
4. Homeowner's Insurance
As a renter, you may have purchased renter's insurance and been pleasantly surprised at the price tag. One of the costs of homeownership that differs from renting is insurance. Homeowners are liable for far more than renters, and therefore their insurance policies will also be more complex and more costly.
5. Lawn Care
Whether you plan to handle it yourself or hire help, lawn care comes with an associated expense. This may come in the form of lawn care tools and equipment or a landscapers' invoice, but either way it's something to be mentally and financially prepared to handle.
Don't let these costs of homeownership discourage you from buying a home. By informing yourself and being prepared with a financial plan, you can be in your best position to buy your first home. For more information about becoming a first-time homebuyer, contact us today!
