Not a One-Time Deal: 6 Recurring Monthly Costs of Owning a Home

Published October 9, 2017

One of the most important aspects of planning the purchase of a home is budgeting for expenses. If you’re currently renting, you already know there are monthly expenses such as utilities, renter’s insurance and garbage collection. When you buy a home, you’ll add a few others to the list, so it’s important to budget for these six recurring monthly costs of owning a home to make sure you can live comfortably. To keep your budget on track with your new home in the picture, you should plan for the following:

  1. Property Taxes

Your local government uses property tax revenue to fund things like the school system, the fire department, police department and other government services. The amount you pay is typically based upon the assessed value of your home. This figure can add a few hundred dollars to your mortgage payment each month, so it’s important to take it into consideration when you’re calculating your budget.

  1. Private Mortgage Insurance

This may or may not apply to you, depending upon the amount of your down payment. If you have 20 percent of your purchase price to use as a down payment, you can skip to number three below. However, if you have less than 20 percent, you’ll pay private mortgage insurance each month to protect your lending institution should you default on the loan. The good news is once your equity in the home exceeds 20 percent of the amount you owe, PMI can be dropped. Many people make extra payments against their mortgage’s principal balance each month to get rid of private mortgage insurance as quickly as possible

  1. Homeowners Insurance

Homeowners insurance is also more expensive than renters insurance. After all, homeowners insurance must cover the structure as well its contents. Renter’s insurance only covers the contents of your apartment, so it costs less. To make this as affordable as possible, shop around and get some home insurance quotes before settling on a particular company or policy.

  1. HOA Fees

If you live in a neighborhood with private amenities such as tennis courts, swimming pools, or other shared facilities requiring maintenance, you’ll pay a percentage of the cost of the monthly upkeep of those “common areas” in the form of homeowners association (HOA) fees. While your lender won’t care whether you pay them or not, the association can come after you for failure to pay. In some states, the HOA can foreclose on your property to recover delinquencies.

  1. Home Maintenance

When you own your home, the responsibility falls upon you to conduct routine maintenance. Smart financial advisors tell their clients to sock bucks away each month for a home maintenance fund. That way, if something unexpected comes up, they can avoid going deeper into to debt to repair it

  1. Higher Utility Bills

Your utility, water and garbage collection bills will increase when you purchase a home. Houses use more energy, lawns require water and rather than paying a percentage of a building’s overall garbage bill, you’ll be paying your own in its entirety.

As you can see, owning a home brings a number of new expenses along with the privilege of ruling your own castle. The good news is, these six recurring costs of owning a home are pretty constant so careful budgeting will enable you to get handle on these expenses and begin to save again. At first glance, it looks far more expensive to own than to rent, but keep in mind, once you get your mortgage paid, your living expenses will be far less and you don’t have to worry about a landlord raising the rent every year.ur property to recover delinquencies.

  1. Home Maintenance

When you own your home, the responsibility falls upon you to conduct routine maintenance. Smart financial advisors tell their clients to sock bucks away each month for a home maintenance fund. That way, if something unexpected comes up, they can avoid going deeper into to debt to repair it.

  1. Higher Utility Bills

Your utility, water and garbage collection bills will increase when you purchase a home. Houses use more energy, lawns require water and rather than paying a percentage of a building’s overall garbage bill, you’ll be paying your own in its entirety.

As you can see, owning a home brings a number of new expenses along with the privilege of ruling your own castle. The good news is, these six recurring costs of owning a home are pretty constant so careful budgeting will enable you to get handle on these expenses and begin to save again. At first glance, it looks far more expensive to own than to rent, but keep in mind, once you get your mortgage paid, your living expenses will be far less and you don’t have to worry about a landlord raising the rent every year.

The post Not a One-Time Deal: 6 Recurring Monthly Costs of Owning a Home appeared first on Native News Online.

This BBSNews article was syndicated from Native News Online, and written by Native News Online Staff. Read the original article here.