Besides the Mortgage, What Additional Expenses are Involved in Owning a Home?

Published by julia | Filed under Buyer / Seller Tips, Miscellaneous, Real Estate

Everyone knows that the mortgage payment is the main cost of owning a home, but too many people who buy houses go into the deal thinking that the monthly payment quoted to them by the mortgage company is the only expense they will have. They couldn’t be more wrong. There are several significant expenses involved in owning a home, and if you’ve never owned one before, you need to know about these so you can budget correctly and not be surprised when those bills start coming in.

1.  Homeowner’s insurance–You’ll likely be required to carry a certain amount of this by your state. Amounts vary from state to state. The good news is that you can roll the payments for the insurance into your monthly mortgage payment if you like, though this will raise your monthly payments. It is more convenient than making an annual payment for the insurance separately, however.

2.  Taxes–You will be required to pay property taxes each year on your home. The taxes are determined by your city and county. You can pay the taxes out of pocket each year, or have the taxes divided into 12 equal monthly payments and then rolled into your mortgage payment. Most people find the latter the more convenient option.

3. Utility bills–Electricity, water, garbage pick-up, and sewer expenses are all your responsibility. Most cities roll garbage and sewer expenses into your water or electric bill, but you’re still going to have to pay these things as a homeowner, one way or another.

4.  Maintenance expenses–As a homeowner, any maintenance is your responsibility. This is unlike renting, where the landlord or property management company is responsible for taking care of any maintenance and repairs. Be sure to budget for these things whenever you buy a home so you aren’t caught without the necessary funds to take care of household needs when they come up.