November 16th, 2016 5:06 AM by Jackie A. Graves
Writing a check
for the mortgage payment is just the beginning. Knowing these extra
homeownership expenses can keep you from blowing the budget.
It is easy for first-time homebuyers — and
others — to get caught up in the excitement of purchasing a home and forget to
factor in the true costs of homeownership.
Here are four “hidden”
homeownership costs that go far beyond simply covering the mortgage. Make sure
to account for them, or you risk seeing your house budget go up in
smoke. They are:
When my husband and I bought our
first home together, we failed to get an accurate cost for utilities. Instead,
we chose to rely on the Realtor and the former homeowner to estimate the
cost of heating and cooling the house.
That was a mistake. The home is
a 3,700-square-foot ranch house with two separate furnaces built in the
1970s — and our winters are incredibly cold.
We were shocked when we received
our first big winter heating bill — it was $200 more than we anticipated
for the month. Yikes!
Make sure you properly budget for
utilities — including gas, water, electricity, telephone, internet and
garbage — when you figure out your monthly home budget. Ask the
homeowner for recent copies of utility bills — rather than his or her simple
estimate — so you have realistic numbers.
If you’ve never owned a home
before, you may forget to factor in a home’s maintenance costs when configuring
Routine maintenance costs for things like
paint touch-ups, carpet cleaning and gutter cleaning can really add up over the
course of a year. According to Realtor.com:
A standard rule of thumb is to
budget at least 1 percent of your home’s purchase price each year for home
Do you need to purchase
appliances or furniture for your new home, or can you live with what you have? Money magazine
Bring as much from your old home
as possible, giving yourself six months to settle in. At that point, you can
determine what new items you actually need.
If your down payment is less than
20 percent of the purchase price of the house, you are required to get private
mortgage insurance, which protects the lender if you default. The fees for
PMI vary. According to Realtor.com:
The rules are complicated, but
usually once you have paid down the mortgage so you owe less than 78 percent of
the purchase price, you can drop the PMI payments.
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