For most people, becoming a homeowner is a dream come true. But finding the perfect home is also frequently an emotionally driven process. Many new homeowners are sticker-shocked once they discover how much it costs to maintain their homes, especially on top of the mortgage. Here are four hidden expenses anyone shopping for a new home needs to know.
Property taxes not only vary by where you live, but they can also fluctuate depending on the city in which you reside and the type of home you purchased. If youbuy a single-family home, you need to factor in the cost of property taxes. If you are more of an apartment dweller or love condo living, you’ll still be liable for taxes every year.
Regardless of property type, once you have a mortgage, you’ll also need homeowners’ insurance. Most mortgage lenders require proof of coverage prior to closing. You’ll need to choose a policy that offers enough coverage for everything you own, plus your home. When it comes to homeowners’ insurance, there are limitations. Some policies only cover the home and your possessions, so if you plan on purchasing an apartment or condo, you may need an additional rider. This is mostly for cases of accidents while on the property. If you live in a flood zone, you also need an additional rider for that.
In addition to regular maintenance, potential home buyers also need to consider the cost of repairs. From appliance malfunctions to your furnace not working on the coldest day of the year, you need to save for unforeseen emergencies and consider the cost of repairs and hiring reputable contractors. Repair contractors who are licensed by the state must meet strict professional requirements in order to obtain that license.
Homeowners also need to save formonthly and annual maintenance costs. Aside from servicing your HVAC, you also need to account for lawn maintenance, gutter cleaning, roof inspection and power-washing the exterior. Before closing, your real estate agent can help you determine how much routine maintenance costs for the property.
Shopping for a new home takes research and planning. Nothing’s more disappointing than falling head over heels in love only to find out you can’t afford the upkeep. To avoid having to start your search over again, be sure to factor in the cost of maintenance, repairs and any other recurring monthly charges before making a final decision.
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