Hidden Home Expenses Most Buyers Don’t Know About

When you buy a home, you expect to pay standard things like your utility and mortgage bills. But what about hidden home expenses you aren’t expecting? While most buyers don’t even realize these are a possibility, they can be crippling, and can lead to financial ruin unless you plan for them.

Hidden Home Expenses to Watch out For

From property taxes to insurance, there are dozens of hidden home expenses that can make the price of home ownership much, much higher. Here are a few of the primary culprits:

1. Property Taxes

Many home buyers make the mistake of looking at a mortgage and calling a home affordable. The unfortunate part is that they don’t often factor in property taxes – a necessary expense that you can’t get out of paying. To ensure you can afford your property taxes, divide the annual amount by 12 and apply it to your monthly mortgage payments. Be advised, as well, that property taxes can fluctuate (usually increasing) over time.

2. Property Insurance

Insurance can be expensive, especially if your home is large or high-value. Even if you paid renter’s insurance while you leased a home, you’ll still have to up your budget to cover homeowner’s insurance. What’s more, you’ll also have to consider the factors that can influence the price of your property insurance, such as older HVAC or plumbing systems and a location in a disaster-prone area.

3. Maintenance

Home repairs and maintenance will be around at the end of the earth, and it’s important to budget for these expenses. The day you buy your new home, a heating system or water system could go out, and you need to be able to cover it. This is one of the primary reasons mortgage experts recommend not cleaning out your emergency fund to make a down payment – you may need that money later.

4. Grounds Care

If you have a lawn, garden, or pool, it’s going to cost money to maintain. This could range anywhere from about $50 a month to several hundred or even more, depending on the size and scope of your home’s outdoor space.

5. Additions

Additions – such as dormers, porches, sheds, and other outdoor buildings – can get expensive quite quickly. If your home doesn’t function as is when you purchase it, it’s wise to work these expenses into your budget as soon as possible. This will allow you to plan accordingly and to avoid unexpected bills.

Home Ownership Made More Affordable

There’s no doubt about it: owning a home is expensive. Fortunately, you can budget accordingly and make smarter financial decisions when you understand the hidden home expenses that can crop up and bite you. By planning and saving for these things, you can save money on your home expenses, keep your budget intact, and ensure your home remains a smart financial decision for years to come.