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12 Hidden Costs of Home Ownership

If it’s your first time owning a home, you may not be aware of all of the things that come along with home ownership. There are many costs that can sneak up on new homeowners during the process!

Owning a home can lead you to a path of financial stability, and each monthly mortgage payment is an investment and will increase your home’s equity and value. However, many buyers find themselves unprepared for the true cost of owning property and may be alarmed at how largely homeownership can hurt their wallet. If you are a first time homeowner, here is a guide to hidden costs of home ownership that you may not have anticipated at first glance:

  1. Inspection & Appraisal Fees

    Before purchasing a home, you will have to pay for a home inspection and an appraisal. The costs of these are tolerated by buyers because they are essential to avoiding buying a property with multiple flaws or paying more than you should.

  2. Closing Costs

    Closing costs are also fees that you should consider. Some buyers can negotiate with the seller for a contribution to these costs, but you should be prepared with cash for 2 to 4 percent of the mortgage balance, depending on the area.

  3. Taxes

    When you become a homeowner, you need to pay property taxes, which are a part of the mortgage that you pay into each month. Property taxes will go up and increase your housing costs, even if you have a fixed-rate home loan.

  4. Insurance

    You’ll also need to think about insurance. Your lender will require you to have home insurance, which can be expensive depending on various factors, such as construction materials and the location of your home. Even if you have renter’s insurance, it will quickly become clear that home insurance costs more because you’re paying to rebuild your home in addition to replacing personal items. Costs of insurance can increase over time, and you might need additional insurance if you live in an earthquake or flood zone.

  5. Moving Costs

    Moving costs can also add up quickly. You will be paying for not only a moving company or truck renting, but you also will be making deposits to start all of your utilities. Depending on where you home is, utility bills can be costly. Utilities such as gas, water and electricity might be higher than you expect when you move into your home depending on your area. You may also need to pay for garbage collection.

  6. Furniture and Decorations

    Many homeowners don’t think about these costs, but furnishing and decorating your home can be a huge contribution to your bills. People who are moving from an apartment to a home often forget that they will likely need to purchase a lot more furniture to fill the home than previously needed. Of coarse, you are able to hold expenses like these by waiting for a year or two to buy extra things that aren’t essential to your home.

  7. Maintenance

    Maintenance for the interior of your home will cost both time and money. You may be able to change your furnace filters, keep your appliances running, and clean your gutters yourself, but you may need to hire a contractor for cleaning and inspecting your chimney and to make sure your heating and air conditioning system is running smoothly.

  8. Yard Care

    Whether you like to handle your yard work by yourself or if you hire a professional, you will have to pay to keep your landscape alive either way. A lot of people forget that lawn equipment can be very expensive, especially if you have a lot of land. You may need items like a snow or leaf blower as well, depending on your area.

  9. Repairs

    Even though maintenance tasks are generally predictable, the most expensive part of homeownership usually includes repairs that you can’t predict, such as repairing the roof, fixing loose tiles, or paying to fix mold mitigation in your basement.

    The possibilities of these problems are endless, so you should do the best that you can to set aside savings for these types of obstacles in case of emergency. Some financial experts advise budgeting for 1 or 2 percent of your mortgage balance as a yearly maintenance and repair fund.

  10. Home Additions

    If you’re planning on buying some add-ons to your home, you also need to be aware of how those costs can add up. These can include decks, patios, sheds, and additional rooms that you may want to add. Not only will you be paying for the parts and labor, but your taxes will also go up every year.

  11. Pest Control

    Pest control can also be something that adds up, even if you don’t think you’ll need to deal with it. Having to deal with termites, bats, cockroaches, or mice can cost a lot of money, and you should be prepared for it if it happens. Spending a couple hundred dollars for routine maintenance to check on these problems will save you a lot in the long run, rather than having to pay for getting your house completely turned around, throwing out furniture or replacing the floor because pests ruined it.

  12. Children and Pets

    If you’re thinking about the long run, pets and kids can also be a costly addition to your bills. Not only will they add to your costs of food, extra curricular activities, clothes, and phones, but the damages they cause can also give you a run for your money. The possibility of getting your walls drawn on or punctured, running through the screen door, broken windows, and spills on expensive furniture are all highly possible. Make sure you set aside money that can cover these things when they happen out of the blue.

All things considered, even though owning a home may cost more than you think, the investment in property can be worthwhile as long as you buy what you can afford and budget for both the expected and unexpected costs!

Contact Paul Chunyk

Reach out to me, I would love to give you more details and get you headed in the right direction to accomplish your goals.

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