What are Some Common Costs of Owning a Home?

Owning a home is a dream for many Americans. And while it is a great investment, there are several costs that go along with owning a home that you may not be aware of. Here are some of those costs to help you prepare for home ownership without any major financial surprises.

Property Taxes
Your property tax is one cost that many people do not think about when they purchase a home. Many homeowners pay their property tax twice each year. However, you can work out a deal with your mortgage lender in which your property taxes can be factored into your monthly mortgage payments.

Septic Tanks
If you have a septic tank rather than connecting to the main sewer line, you should be prepared for repair costs or maintenance costs. Tree roots are a common problem with septic tanks and, if neglected, can cause thousands of dollars of repairs.

Repairs
Unlike renting, you are responsible for the cost when your home needs repairs. If you are purchasing an older home that has not had many upgrades, you will likely find yourself making repairs soon after moving in.

Inspections
Before you make your decision on a home, you will want to hire an inspector to inspect it for you. By hiring your own inspector, you can be sure that they are working in your best interest so they will alert you to potential problems in the near future. A good inspector could cost a few hundred dollars, but it could save you thousands in the long run.

Mortgage Insurance
If you have less than 20 percent equity built up in your home, you will be required to pay private mortgage insurance, or PMI. This is typically built into your mortgage payments and it helps protect your lender’s interest in the property.

Utility Bills
When renting a home or an apartment, the landlord often pays for some of the utility bills, such as water and sewer. When you own a home, these bills are the homeowner’s responsibility. Also, you may find that your electricity bills and other utilities are higher each month especially if your new home is larger than the place you were renting before.

Maintenance
There are several tasks that you take for granted before you own a home. Maintaining the lawn is just one of those chores that you will either have to do yourself or hire someone to do for you. But changing furnace and air filters and other chores will be your responsibility now that you are a homeowner.

These extra costs should not deter you from continuing your goal of owning a home. The cost of home ownership is nothing compared to the freedom and sense of accomplishment that you will feel when you move in. Just be prepared for the extra cost and save up some extra money before making your purchase if you need to.