It is important to understand the expenses before the closing of the purchase-sale contract. However, these are only the beginning of a new stage of his life. Your down payment far from being the last of the expenses you will have to pay as a homeowner is rather the first of many. Here are 10 typical expenses new owners should put on their radar.
1. Monthly mortgage
Your budget for the next 15 or 30 years, depending on the case, will have to be calculated with the payment of your monthly mortgage.
2. Property taxes
These are usually paid once or twice a year, but property tax laws vary from state to state. Sometimes they can be revalued to a lower or higher amount, related to the sale amount of the house.
3. Homeowners Insurance
This also varies by state and region and is influenced by other variables such as the security features implemented in the home. Insurance can cost about $1,500 or more a year. It can help to package homeowners insurance with other insurance, such as auto and life insurance. It suits insurers and sometimes even offer discounts to do so.
4. Risk Insurance
This includes coverage for many types of natural disasters – earthquakes, floods, tornadoes or hurricanes, depending on the location. It is important to be prepared in advance. Flood insurance, for example, has a 30-day waiting period from the date of purchase before your policy goes into effect.
5. Condominium or HOA Homeowners Association Fees
If you own a condominium, co-op, or home, you will have to pay an annual, quarterly, or monthly fee to maintain the building or community. This is common in gated communities with security guards, swimming pool, sports courts, clubhouse, playground, or any other common service that needs eventual repairs and replacements.
6. Services
As a homeowner, you will have to include in your monthly budget certain fixed expenses such as electricity, water, garbage collection, or cable among others. As much as possible, make an energy saving plan.
7. Repairs and renovations
On occasion you probably have to make certain repairs or renovations to adapt your new home into the one of your dreams.
8. Routine maintenance
Things are not eternal, appliances wear out, faucets leak, etc. You will need to keep some emergency money on hand for a clogged sink or rusty water heater.
9. Garden and/or pool care
Depending on the size of your garden, and the number of plants your house has, your gardening expenses will be less or higher. If it has a pool, it will be even bigger. These amenities, while giving more value and comfort to the property, also imply more maintenance expenses.
10. Moving expenses and new furniture
These may not be an ongoing expense, but they are still an important one after closing the house.
Sometimes it is preferable to invest in furniture of better quality and durability, even if they are a little more expensive so that you do not have to spend on furniture every time you move.
