Overlooked Costs of Homeownership May 10, 2024 by Jennifer NelsonWhat First-Time Buyers Need to Know Congratulations, you’ve made the decision to become a homeowner! While the prospect of owning your own home is undoubtedly exciting, it’s essential to be aware of the commonly overlooked costs that come with homeownership. As a first-time buyer, understanding these expenses upfront can help you budget effectively and avoid any surprises down the road. Let’s explore some of the most commonly overlooked costs of homeownership that every first-time buyer should know about. Property Taxes Property taxes are a recurring expense that many first-time buyers may not fully consider. The amount you’ll owe in property taxes can vary depending on where you live and the value of your home. It’s important to know this figure, as this is factored into your monthly mortgage payment… Homeowners Insurance Homeowners insurance is another essential expense that protects your investment in case of damage or loss. While homeowners insurance is typically required by lenders, the cost can vary based on factors such as the location and condition of your home. Be sure to shop around for the best rates and coverage options. This figure is also important to know, as it is also factored into your monthly mortgage payment. Maintenance and Repairs Owning a home means taking on the responsibility of maintenance and repairs. From routine upkeep like lawn care and HVAC (heating, ventilation & air conditioning) servicing to unexpected repairs like roof leaks or plumbing issues, the costs can add up quickly. It’s essential to set aside funds for these expenses and have a plan in place for handling any maintenance or repair needs that arise. Utilities As a renter, you may be accustomed to having some or all of your utilities included in your monthly rent. However, as a homeowner, you’ll be responsible for covering all utility costs, including electricity, water, gas, and trash removal. Be sure to budget for these expenses and consider ways to make your home more energy-efficient to help lower your utility bills. Homeowners Association (HOA) Fees If you’re buying a home in a planned community or townhome/condominium complex, you may be subject to homeowners association fees. These fees cover amenities and services like landscaping, maintenance of common areas, and community facilities. Make sure to factor HOA fees into your budget when considering a property in a managed community. Some HOA’s include trash service and snow removal. Closing Costs Closing costs are processing fees you pay when you close on your mortgage. Closing costs are usually 3-6% of your loan balance. Appraisal fees, title fees, and inspection fees are a few examples of common closing costs. You can ask your mortgage lender for an estimate of these costs. In Conclusion By understanding and budgeting for these expenses upfront, you can avoid financial surprises and enjoy the rewards of homeownership with confidence. If you’re considering buying your first home, and would like support in navigating this process to ensure you’re fully prepared for homeownership, reach out to me! I’d love to connect with you. Contact Jennifer