Expenses That Home Owners Should Expect
When you sit down in the title insurance office and sign your paperwork at closing, you’ll probably feel a big sense of relief. It’s finally over! You are a homeowner. The reality, though, is that your financial commitment is only just beginning. Owning a home comes with a variety of ongoing expenses. Knowing some of the most common recurring ones can help you to plan accordingly.
You are probably well aware of your monthly mortgage payment. Property tax rates vary widely from state to state, and the previous owner may have qualified for special exemptions that lowered their tax rate. Thus, you should always check with the local tax assessor’s office to make sure you know what you will have to pay going forward. You can either set up an escrow account to spread out the payments monthly, or you can save for the annual tax payment yourself.
If you lived in an apartment, you may have paid for electric or cable services. As a homeowner, you will also pay for water and any services the city provides, like waste removal and curb maintenance. Expect to shell out an additional $100-300 dollars a month over what you were paying as a renter, and don’t overlook seasonal services like snow removal.
Unless you purchased a condo – in which case you will have to budget for recurring homeowner’s association (HOA) fees – you will be paying for all maintenance on your property, including the cost of replacing worn out appliances, installing a new roof and gutters, replacing windows, and repairing the foundation. Mortgage experts recommend that you set aside one percent of the home’s value each year for maintenance — that’s $3,000 for a house valued at $300,000.