Mortgage rates that are relatively low and home prices that are more affordable are creating more of a renewed interest in owning a home. This is especially true with renters who are fed up with having their costs for rent rise on a yearly basis. Owning a home can be a great start on the path to a good financial future, but buyers might be heading into this not really prepared for the true cost of owning a home. The money flowing out doesn’t begin and end with the mortgage. Let’s take a quick peek at some of the other things that can take a toll on a home owner’s wallet.
What people pay for property taxes varies from state to state and from city to city. The best time to take a look at property taxes is before you put in an initial bid on a house. A house of a certain price in one city might have property taxes that are double what a house of the same price might be in a different city. The difference in the price of the property taxes could be the one thing that will put you over budget for the year with regards to your house.
If you are buying a new home, you will want to have it inspected and covered by pest control services before you move into it. Most pest control companies will offer flexible plans that can be tailored to fit your needs. The thing about having an exterminator out is that if you do this before you move in, they can be sure to get all of those little nooks and crannies that they just don’t have access to when furniture has been put in the home. Additionally, you will want to go ahead and get a contract with the company that will be doing the pest control at your home for the foreseeable future.
This is another one of the hidden costs of owning a home. Let’s face it, a home will more than likely be the largest thing you ever buy. For this reason, it is always a good idea to make sure that before you buy it, you have it completely inspected. Home inspectors can point out the little things – and big things – that might need to be repaired. You can then use this information as a point of leverage when you are negotiating the price of the home or even when you are deciding whether or not to buy the property. This isn’t something that is required, but it is highly recommended. It will let you know a little bit more about the property and let you know which things you might need to plan to repair in the near future. Home inspections typically cost a few hundred dollars and the inspection is generally done before you close on the house.
Sometimes buyers can negotiate with the seller of the home when it comes to a contribution towards these costs. Even then, when you buy a home, you need to be ready to have cash on hand for these fees, which could be as much as 4% of the balance of the mortgage, depending on the area you are in.
Maintenance for both the exterior and the interior of home costs both in terms of time and money. You might be able to change the filters on the furnace, clean the gutters, and make sure that your appliances stay running smoothly all by yourself. You might also need to hire a contractor from time to time for those things that you are not able to handle by yourself… like maintaining the HVAC system, or cleaning and inspecting the chimney.
This is another thing you can’t escape. Depending on your living situation now, your expenses for things like water, power, and gas could go up when you make the move into your new home. You will also probably end up having to pay for garbage collection, although some cities include this with the water and sewer bill. Don’t forget that you will also still have to pay for your cable, phone bill, and internet too.
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