Planning to purchase a home? You may already expect to make a down payment, pay for closing costs, and make an ongoing monthly mortgage payment for the life of your loan. But did you know there may be other costs to consider if you’re thinking about becoming a homeowner? Here are a few additional expenses to keep in mind for your household budget that go beyond your monthly mortgage payment:
Homeowners’ association/condo fees: If you buy a home within a community represented by a homeowners’ association (HOA) or condominium association, you may be required to pay fees on a monthly, quarterly or annual basis to help cover the cost of maintenance to community structures, amenities and grounds. These may be included as part of your mortgage payment. If not, you’ll need to budget for them.
Maintenance, updates & repairs: Keeping a property in top condition can be costly. This is particularly true of older homes, where system and appliance warranties may have expired. Home warranty plans provide repair or replacement coverage for certain built-in appliances and major home systems for a specific length of time. They can cost a few hundred dollars a year, depending on your mortgage size and where you live.
Utilities: Budgeting for heating, cooling, electricity, natural gas, water/sewage, and trash removal are some of the expenses homeowners may face on a monthly basis. Before buying a home, consider asking the seller for a record of the last 12 months of utility bills for the home.
Personalization: An expense that catches many buyers off-guard is the cost of updating elements of the home to meet your needs or personal taste. New furniture, window treatments and lawn care equipment are examples of costs that can quickly add up. Try to make a list of items you need, and then create a budget to help keep costs under control.
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