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Know the Cost of Home Ownership Before Purchasing a Home

Many new homeowners fall into the trap of thinking that owning a home is not much different from renting one. This can partly be attributed to misleading advertisements and television shows which portray new home owners happily moving in to a new home with little or no preparation or planning. What is not shown is the work and the expense of maintaining a household, and this is an aspect of home ownership that virtually all new owners will encounter.

Cost of Home Ownership

Would-be homeowners are aware that they need to pay obvious costs like mortgage interest and utility bills. What they overlook however, are other costs like property taxes, inspection, maintenance, and repairs. When not properly accounted for, these expenses can rip a giant hole in any budget. With that in mind, here are some tips on how to properly handle the cost of home ownership:

  • House – Your budget should start with the cost of the house itself. When assessing homes for sale, do not spend your entire budget on the house purchase alone. Set aside a percentage of your budget for title transfers, closing fees, home inspection, and possible repairs.
  • Tax – Consider the property tax in the area where you plan to buy a house, as this varies from place to place. You may find homes for sale in Fishers, IN that have the same price as homes you were considering in other locations, but the Fishers homes might have a lower property tax rate.
  • Insurance – The cost of insurance tends to rise when the house under consideration has old electrical and plumbing systems that are prone to damage. Take note that homes located in flood-prone areas should also factor in the additional cost of hazard insurance.

Maintenance – A front lawn alone can cost as much as $300/month in maintenance costs. Don’t forget that you’ll also need to invest in home security, especially if you live alone and tend to leave the house for long hours every day.

Once you have calculated these costs, subtract the combined cost from your overall budget. This will allow you to determine the maximum amount you can spend on purchasing a home from trusted real estate services like Berkshire Hathaway Home Services – The Tim O’Connor Team.

Sources:

The Hidden Costs Of Home Ownership, Investopedia.com

4 Overlooked Homeownership Costs, Investopedia.com

20 Hidden Costs of Home Ownership, cnbc.com

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