Unexpected Costs of Homeownership

Before buying a home, it's important to consider various hidden costs that come with homeownership. For many people, owning a home is a goal that provides a better lifestyle. However, people who fail to budget for all the expenses that come with homeownership may find they can't afford to stay in their home. It's better to plan ahead rather than be forced to let go of a home in a short sale or foreclosure.

Homeowners have more privacy than the average renter. However, they pay a price for it. In addition to the principal, interest, home owner's insurance, taxes and home owner's association fees, homeowners have expenses related to home maintenance and upkeep. It's wise to plan for the four major hidden costs of homeownership.

Lawn Care Costs

When trying to figure out how much home they can afford, aspiring homeowners need to also factor in the cost of lawn maintenance and landscaping. Many home owner associations require lawns be maintained at minimum standards. Depending on the size of the lot, lawn care costs can average $100 to $300 a month. Paying for pest control is an additional expense to tack on. Also, homeowners need to purchase gardening tools.

Heating and Cooling Costs

While some rentals cover the costs of heating or cooling, homeowners can expect higher utility bills. Also, homeowners need to purchase air filters every three months. In addition to electric and gas, the homeowner is responsible for the water bill. The air-conditioning unit may need to be repaired from time to time. Overall, expect to spend an additional $200 a month on utility bills and maintenance.

Decorating Costs

Few people purchase a new home and then leave it like a blank canvas. Renters will often skip the fancy cornice boards and drapes. To turn a home into a dream home, plan on spending thousands of dollars on furniture, accessories and other home décor items. Most homes are larger than apartment units so a homeowner spends more on furniture to fill the space. Also, there is no property management company to make sure the appliances are fixed. Budget at least $100 a month for decorating and furniture.

Exterior, Interior Costs

Homeowners need to put money aside for painting the exterior of the house. They may need to replace the carpet every 7 years. Windows often need to be replaced. People with pets may have to replace torn screens or chewed fences. Some home owner associations require homeowners to have their driveways and homes pressure washed. When calculating the true cost of owning a home, factor in an additional $50 a month for miscellaneous maintenance costs.

Some aspiring homeowners are under the delusion that if they get a fixed rate mortgage, their expenses will always be predictable. The reality is taxes can always go up or down. Also, homeowner's insurance rates may rise. In essence, it's as if someone “raised the rent.” There are many things to consider when figuring out a budget for purchasing a new home.

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