Buying a Home? Beware of The Hidden Costs of Homeownership
|Buying a Home? Beware of The Hidden Costs of Homeownership|
Anyone who owns a home knows that there are many additional costs associated with owning a home. Many first-time homeowners base their decision to buy a home on their ability to make the monthly mortgage payments. In fact, there are many other costs that go into owning a home than just the mortgage payment.
Additionally, a home purchase triggers a series of additional spending on appliances, furnishings and remodelling activities that exceed typical spending levels of non-moving owners or renters and can persist for two years after moving.
Let's take a look at the most overlooked items that tend to be a burden to all homeowners:
Homeowners are more inclined to purchase luxury items that renters would not, such as granite counter tops, pricey fixtures, alarm systems and other gadgetry. The cost of these luxury amenities can easily add thousands of dollars to the cost of owning a home.
2. Furnishings costs
1. Monthly mortgage payment
2. Property taxes
3. Utility bills
4. Maintenance costs
You should budget between 1% to 2% of your home’s value for annual maintenance. If you bought a $200,000 home, for example, you should set aside at least $2,000 a year, or around $200 a month. Some years you'll spend less, but others you could spend more. A new roof for your home, for example, can cost $4,000 or more.
Naturally, some homes cost more to maintain than others. Older homes usually need more maintenance than newer homes, even if it has been recently renovated. Also, don't assume that because a home is new, it won't need any maintenance for a while. All homes need to be attended to on a regular basis to keep them from falling into a state of disrepair.
The Bottom Line