6 Home Expenses Beyond Your Mortgage Payment
Purchasing your first home is a huge step in your financial life. You’re able to establish roots and start earning equity in your home. However, the expense of purchasing a home includes more than just your closing costs, down payment and ongoing mortgage payments. Here are seven expenses first-time homeowners should expect beyond their mortgage.
Your realtor should have discussed this with you, but you need to pay your property taxes every year. Property taxes vary depending on where you live and the size and value of your property. The cost of this tax generally fluctuates annually. Most mortgage lenders can include an escrow amount in your monthly payment for property taxes, then automatically remit the payment to your municipality.
Homeowners insurance is used to cover an array of things in and surrounding your home. It covers interior and exterior property damage, injury due to an accident on your property or items stolen from your home, but varies policy to policy. Homeowners insurance is not only a good personal financial decision, your lender will require it. The amount you pay can vary depending on what is covered by your policy, the size and value of your house, and other factors.
Homeowners Association and Condo Fees
Depending on where you live, you may be required to pay a monthly or yearly Homeowners Association (HOA) fee. For single-family homes, these fees can cover neighborhood amenities like playgrounds, parks or other shared spaces. For condos, your condo fee will cover things like maintenance of common areas and shoveling the walkways leading up to your door. If your residence requires HOA or condo fees, you’ll want to factor this into your monthly budget.
Water, gas, and electric are an added cost you pay monthly. The amount you owe each month can fluctuate depending on the season or how much water, gas and electricity you’re using. There are some easy ways you can cut down on your energy costs, like taking shorter showers and remembering to turn off the lights to save yourself a few bucks on your utility bill.
General Maintenance and Upkeep
Like people, houses age and you need to take care of them. Whether it’s cleaning your gutters, replacing a water heater or maintaining a well-manicured lawn, routine maintenance and upkeep should be a part of your home’s budget. You may want to update some fixtures in your home or add new bushes in your backyard for summer. Try to set aside some money each month for upkeep expenses. For bigger home improvement projects, check out our Home Equity Line of Credit!
Furniture and Appliances
Once you’re moved in, you get to start furnishing your home! If you’re discovering you have more space to work with in your new abode, you may need more furniture than what you brought with you. Yes, shopping for furniture sounds expensive and time consuming, but it doesn’t have to be! We’ve shared a few tips on how you can affordably furnish your new home.
There will be a lot of excitement as you settle into your new home, but this new chapter can also come with surprises. By factoring the various costs of owning a home into your budget, you can comfortably settle in without any added surprises to your finances.