Looking to buy a home? It’s an exciting prospect, but a costly one.
There is the actual price of the home itself, usually cared for with a mortgage. That mortgage will come with a list of closing costs that can boggle first-time buyers. Taxes and insurance costs may be a part of your monthly mortgage payment.
But there are other hidden home costs that are not factored into the monthly mortgage. In order to assess the costs of owning a home, you need to be aware of these as well.
Learn about the hidden costs of homeownership here.
Mortgage Costs
When you are approved for a home mortgage, you will attend a “closing” meeting during which the property is transferred to you from the seller. There will be closing costs that you will have to pay at that time, which can include:
- Mortgage interest (usually one month’s worth)
- Property taxes and home insurance escrow payments (required)
- Lender application fees (these costs vary with different lenders)
- Attorney’s fees (only if you use an attorney)
- Title insurance (the insurance policy for the deed)
- Recording fees (paid to the county clerk’s office to record the deed)
You should have some idea of the total amount of closing costs, as your lender is to provide an estimate at the time you apply for your mortgage. But expect some minor changes in the final costs at closing time.
Finding an experienced realtor who can advise you of the entire buying process in your area is a must as you negotiate these costs. Go here to learn more about the entire process.
Once you have closed on your home, it’s time to move in. Then, the costs of maintaining your home come into play.
Maintenance Costs
There are a few “big” maintenance items that come with homeownership that need to be factored into your future budgeting.
The Roof
The average roof on a home should last between 15 and 20 years. Water stains on ceilings or actual leaks mean the roof needs inspection, repair, or replacement. The average cost to replace a roof is $7,875.00 as of the year 2020.
The HVAC System
This is your ventilation, air conditioning, and heating system for the home. You should have this inspected by a professional at least once a year, to keep the unit in working order. The costs of replacing this system can vary widely, depending on the size of the unit, and the condition of the ductwork in your home. There are useful calculators that can help you figure replacement costs for your situation.
Electrical and Plumbing
While these systems should be inspected as part of the home buying process, occasional repairs will be needed so that you are not risking larger repairs later.
Other Maintenance Costs
Smaller costs that should be calculated can include:
- Landscaping and lawn care
- Pest control
- Cosmetic upkeep, such as paint, floor replacement
- Home association or condo fees (monthly)
Calculating Costs of Homeownership
Calculating the true costs of homeownership in your area should be the first step when considering buying a home. Knowing your monthly mortgage payment, along with a good estimate of monthly maintenance costs will help you find the right home for the right price.
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