Buying a home is a huge financial milestone, but the costs don’t stop at the down payment and monthly mortgage. Many first-time homeowners are surprised by the less obvious expenses that come with owning property.
Let’s explore the 10 hidden costs you need to keep in mind to avoid unpleasant surprises:
1. Property Taxes: A Growing Expense
Property taxes can fluctuate yearly based on your home’s value and location. It’s essential to budget for these changes and check the local rates before buying a home.
2. Homeowners Association Fees
If your home is in a planned community or condo, you’ll likely pay monthly or annual homeowners association (HOA) fees. These can cover shared services like landscaping, but they vary widely.
3. Home Maintenance and Repairs
The rule of thumb is to set aside 1% of your home’s value annually for maintenance. This includes everything from fixing a leaky roof to unexpected plumbing repairs.
4. Hidden Utility Bills: The True Cost of Comfort
The size of your new home can significantly impact heating, cooling, and electricity costs. Factor in higher utility bills, especially if you’re moving from an apartment to a larger house.
5. Appliance Repairs and Replacements
Owning a home means owning all the appliances inside it. Plan for the eventual repair or replacement of items like refrigerators, washing machines, and water heaters.
6. Lawn Care and Landscaping
Whether you hire help or invest in equipment, maintaining your lawn can become a costly, recurring expense. Some neighborhoods might even require specific upkeep.
— Pro tip
Set aside a small emergency fund for home repairs.
Unanticipated expenses can creep up, and it’s better to be prepared than surprised.
7. Pest Control
Regular pest control services can save you from more significant issues down the line, but these come with a price tag. Budget for this ongoing expense, particularly in warmer climates.
8. Insurance Premium Increases
While homeowner’s insurance is a standard monthly cost, premiums can rise after claims or in areas prone to natural disasters. Factor in possible increases and shop around for competitive rates.
9. Furniture and Décor
Moving to a larger home often means more space to furnish and decorate. From new furniture to paint, these costs can quickly add up, so budget accordingly.
10. Closing Costs and Ongoing Fees
Don’t forget about closing costs, title insurance, and potential fees associated with refinancing or selling your home in the future. These can all eat into your budget.
Ready to buy your first home?
Use our mortgage calculator to make sure you’re fully prepared for both expected and unexpected costs