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This may not come as a big surprise to current homeowners, but the costs of owning and maintaining a home can quickly add up. Many first-time home buyers assume that as long as the monthly mortgage payment gets paid then all is well
What they don't realize is that there are many other costs and fees that come along with a new home and many of them may be unexpected. It is important for prospective home buyers to be aware and plan for these costs when calculating how much they can spend on a home.
In today's blog we will go over the obvious costs of owning a home as well as the hidden or unexpected costs that often arise.
First, let's go over the payments and fees that are most likely required by every homeowner, regardless of the state in which the home is in. Naturally, the mortgage payment (which also accounts for the interest) is usually paid on a monthly basis.
Real estate taxes, also known as property taxes, are another fee that every homeowner must pay no matter what state they live in and may be paid annually or monthly. According to a recent report by CBS News, the median property tax rate is around 1% of the market value of the home although it can range from 1 to 3% in today's market (Fried 2011). Monthly utilities, of course, are paid on a monthly basis as well and can include many necessary services like electricity, water, gas, trash, internet access and cable. As you can see, the costs can add up in a heartbeat.
Now that we've discussed the required costs of owning a home let's talk about the more uncertain costs that come along with maintaining a home.
These costs are not definite and may vary from home to home depending on their condition. A newer home will, of course, require less maintenance in the beginning, but it cannot be avoided forever and will eventfully require maintenance in the long run. Older homes will require maintenance earlier on and maybe even months after you close a deal so be prepared if you are interested in a home that has many years on it.
Below is a list of general maintenance repairs and replacements usually required of a home at some point in time:
Exterior, like the roof or brick may need to be repaired or replaced
Landscaping
Windows, caulking could be damaged or worn
Tile, if it breaks or cracks or grout may need to be reapplied
Walls, may need to be re-painted or cracks repaired
Appliances, like the water heater, occasionally break or need to be replaced
These repairs vary depending on weather conditions and how well homeowners maintain their property.
When it comes to owning a home it is clear to see how the costs of keeping and maintaining it can add up. This is an important thing to consider when looking for your dream home especially if the home you are considering is aged. This doesn't mean you shouldn't pursue the home of your dreams if it isn't new. It simply means to be aware of what you are purchasing so you don't end up over paying for a property. Keep in mind that hiring an inspector to do a walkthrough of a home is the best way to foresee the maintenance costs that will eventually be needed.
Fried, Carla. "Counties in the US with the Lowest and Highest Property Propery Tax Rates". CBS News <cbsnews.com> May 18, 2011. Date Accessed: December 25, 2011.
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