Homeownership Fees To Consider Before Purchasing Your First Home

Buying your first home is a big decision – probably one of the most important of your life. To better prepare you for this major milestone, here are several homeownership fees to consider before purchasing your first home:

Mortgage Payment

While you may no longer have rent payments, you do have a mortgage payment. Before beginning the home search, determine how much home you can afford. The best way to do this is to consult a mortgage lender. They will look at your financial situation to determine what you can reasonably afford. Use this number as a starting point, then consider YOUR financial situation and what you can actually afford. Keep in mind; these numbers may not match. ALWAYS go with the number you can actually afford – you don’t want to buy a home only to realize you can’t afford to make the monthly mortgage payments a couple of months down the road.

Property Taxes

Often overlooked by many new homeowners, property taxes vary by state and are typically paid twice a year. Why are they overlooked? While you do pay property taxes living in an apartment, YOU are not responsible for making the payments – the apartment complex includes those costs in your rent. As a homeowner, YOU are responsible for paying the property taxes directly to the state. If you are paying a mortgage, most mortgage companies will require you to have an escrow account where you pay money (often part of your monthly mortgage payment) to be held to pay the property taxes and insurance.

Homeowner’s Insurance

Varying by state and region, homeowner’s insurance can cost anywhere from $500 to $1,500 a year. To keep costs down, consider bundling your homeowner’s insurance with your auto or life insurance.

Homeowner’s Association Fees

Chances are, the neighborhood you live in will require association fees for community features (pools, parks, etc.) and maintenance (lawn care, etc.). Factor this number into your budget – the fees can be monthly, quarterly or yearly.

Utilities

Every homeowner expects to pay utilities – the mistake most buyers make is the value they expect to pay. Utility bills in an apartment are much cheaper than that of a house. As a new homeowner, expect your electric and water bills to increase and figure you will now be paying several utility bills you didn’t when you lived in an apartment (sewer, trash removal, etc.).

Renovations and Repairs    

Gone are the days where you could just call your apartment complex and submit a maintenance request! Owning a house means taking the responsibility of paying for your own renovations and repairs. When buying a home, take note of all the immediate improvements and repairs that need to be completed shortly after taking ownership – and before signing the final documents, ensure the costs of completing the repairs fits into your budget.

Gardening and Yard Maintenance

As a homeowner, you now get to enjoy a front and backyard. While this is one of the great qualities of a home, keep in mind that you will now have to maintain your yard and garden. Also, depending on your neighborhood, you will have to keep your front yard in good looking condition – for curb and community appeal purposes.

Moving Expenses and New Furniture

How much stuff are you moving? Do you have enough furniture to fill your home? Consider both moving and new furniture costs when moving from one location to another.

Estimate all of these homeownership fees along with your income and daily living expenses before signing the final documents to buy a home. Your budget and sanity will be glad you were proactive.

Are you looking to buy your first home? We would be happy to help! Give us a call anytime.