Buying a house isn’t a one time cost. There are several ongoing expenses that will take a shot at your budget, and they must be considered for financial stability.
Too often, young homeowners get themselves into a financial situation they’re simply not equipped to handle. Don’t run the risk of defaulting on your mortgage, and take the time to consider the full breadth of homeownership before you sign a contract.
Here are a few financial elements to consider when owning a home. Take a few notes as you read, and start preparing yourself for the responsibility of homeownership today.
The list price of the home you choose to purchase isn’t the total cost of what you will be paying when you actually buy the home. After getting a loan for the cost of the home, you have to pay a down payment.
Then, you will likely be responsible for paying the closing costs as well. Of course, there’s also added interest as the years pass, so paying a little extra on your mortgage each month is a good idea.
You’ll invest big chunks of money into your home from the very beginning, and it’s vital that your investments are protected. The best way to shield yourself from the financial burden of a freak storm or a burglary is to invest in homeowner’s insurance.
Your homeowner’s insurance pays to replace or fix anything that is stolen or damaged inside of your home, but you can obtain a policy that extends to what’s outside of your home as well. For example, adding “other structures” coverage on your homeowner’s insurance will cover the cost of damage to your privacy fence.
Once you legally are the owner of your home, you’ll be responsible for paying your property taxes each year. Nonpayment of your property taxes could have detrimental effects on your stability, so don’t brush this issue to the wayside.
Lawn care and maintenance
If you don’t do what it takes to maintain your lawn, you could face fines from the city or other penalties. Don’t get lazy about lawn care, and include the cost of maintenance in your financial planning efforts.
You break it, you fix it
You already bought it. When it breaks, you’ll be the one paying to fix whatever it is that’s causing the problem. If your HVAC unit goes out, you’ll need several thousand dollars on hand to fix it quickly.
HOAs and utilities
If you purchase a home that requires you to be a part of a Homeowner’s Association, then you’ll need to factor the cost of membership into your monthly budget. Your utilities in a home may be a little higher than you’re used to paying as well. If you have a pool, you can count on it being even higher.