When you are purchasing a home, it is important to crunch numbers beyond just the cost of affording a monthly mortgage payment to make sure that taking on all of the expenses of the new house will be affordable to you.
Many times, potential new homeowners neglect to account for these non-mortgage costs that can quickly add up and make a huge impact on a home’s actual affordability.
Here are five of the most common underestimated costs of homeownership according to a recent report put out by Consumer Affairs.
The cost of repairs is kind of tricky to budget into homeownership mostly because they can be unpredictable. There’s no telling when a pipe in the wall may burst, for example.
A smart way to factor in a budget for home repairs is to set aside a little bit of money every month in an extra account so that when an emergency repair arises you are mostly ready, if not completely covered. Of course, some major emergency repairs can be covered by homeowners’ insurance.
Everyday maintenance items required to keep your home in as best running shape as possible should be added to the cost of homeownership. This can be things such as taking care of your lawn, new filters for your HVAC system, yearly carpet cleanings, etc.
To get a good idea of what these may cost you in your next home look at what they cost you in your current home and assume that you’ll spend about 1 to 4% more this year with inflation and the cost of a different home. If you are moving into a larger or older home your maintenance costs will probably increase from your current ones.
It’s always a smart idea to have as much insurance coverage as possible on your home. Many homeowners that get into emergency situations requiring the help of insurance funds have regretted going with the cheapest plan possible and therefore not having enough funds to help them out when it comes time to repair their home.
Make sure to call up a few insurance companies or even your current one and ask for a quote of what it would look like to ensure a home you are interested in.
Home Owner Association Fees
Not every neighborhood has a homeowner’s association but many do and with a homeowner’s association comes monthly dues. Some associations charge very low monthly dues in the tens while others can charge into the hundreds or maybe even thousands depending upon the community amenities.
If the home you are interested in is in a neighborhood with a homeowner’s association, make sure that you diligently check into the dues and any other costs of the association.
Property Tax Increases
This is one that is very often forgotten yet very crucial to think about. You may be prepared to pay a certain amount of property taxes now and factor that into the cost of living in your home, but property taxes do increase over time. In some areas, they can increase by a very large amount in just a year.
In some areas, people have been priced out of their homes from the cost of raising property taxes in the area due to the area becoming highly desirable to live in.
For more information on purchasing a home along the Forgotten Coast, and all Forgotten Coast real estate please contact us anytime.
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