Owning a home means there’s no more rent, no more landlords, no more ‘no pets’ policies. You finally have the freedom you’ve always wanted, but you have to be aware that the expenses will surely go beyond your monthly mortgage payment.
However, you should by no means find this discouraging, since you can’t really avoid extra costs related to maintenance or utilities, just to name a few. Careful planning and a strategic approach from the start will allow you to carefully calculate your funds and manage your budget in the best way possible. Here we list some expenses that might come your way, so you will be able to take everything into consideration before you set out to purchase your new residence.
The first thing you’ll consider is probably your mortgage and your monthly interest rate. This is a long-term expense you’ll need to factor in and it truly is the most prominent one. The payment includes the principal, which is the original borrowed amount and the interest rate on that principal. The total amount you’ll be paying is determined by several factors – how much you’ve borrowed from your bank, the interest rate and the amount of time you’ll have to pay the loan off. Shop around and use the free provided tools online to calculate your loan amount by considering all the necessary criteria and find the one that best suits your budget. Even though nowadays you can do this online and on your own, it is still advisable that you talk to a professional and make sure there are no surprises along the way.
Once you decide to make such a long-term financial commitment, it is a good idea to protect yourself and your home by having the appropriate insurance. This means you’ll receive adequate compensation should things like theft or natural disasters occur, and you have to rebuild or repair your residence. Furthermore, it provides liability as well as medical coverage if anyone gets hurt while on your property.
Real estate taxes serve the purpose of funding public expenses such as sidewalks, parks, roads, schools. The annual tax is usually calculated on the part of the municipality by multiplying the local tax rate by the assessed value of your home. Homeowners can look this up on the tax assessor’s website. Also, you can obtain this information from the seller or the seller’s real estate agent.
It is always a good idea to ask the seller for information on yearly utility bills. Since the utilities are not likely to differ much from the given figures once you move in, you can plan your budget accordingly. When planned for, expenses such as heating, cooling, natural gas, electricity or water will not be a strain on your funds. Be sure to consider the size of your family as well, since it will surely affect the utility costs.
SEE ALSO: 5 Ways to Lower Utility Bills
Once you purchase your own property, all the repairs become your own responsibility. Before you make the final decision be sure you thoroughly check the condition of the residence. In order to be certain you’ve got everything covered, seek advice from a qualified home inspector. This way you’ll know what to expect, and when home repairs or replacements of certain parts are due. Unfortunately, not all home maintenance costs can be predicted. It is more likely than not that there will be certain surprises. The upkeep of your landscaping, painting, minor repairs such as faucet leakage or major ones like a roof or floor replacement requires you to leave room in your planned budget for an emergency fund.
Finally, you have some outdoor space and room for a dreamy garden. The costs of yard maintenance do not have to be exorbitant, but there are things you have to take care of, like mowing the lawn for example. While there are many cost-effective landscaping options that will enable you to have a wonderful outdoor space, there are some things you won’t be able to do without such as a lawnmower or a rake.
Inspecting the property is one thing, but the real feel comes after you move in. You love the house, but you hate the kitchen counter. Your furniture doesn’t fit, the color of your walls doesn’t match the drapes and you really think that a carpet would tie a room together. This can be a slippery slope, a couple of bucks here, a couple there may amount to a whopping sum you didn’t see coming. Try to envision what the place would look like once you’ve moved all your belongings and plan your budget according to what you might want to adjust or replace.
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Purchasing a home is exciting, but only if you take all the necessary costs into consideration. Not having a plan may result in overwhelming stress and most likely – credit card debt. The more you anticipate, the happier you’ll be during the whole process, and in the end, the only thing you’ll have to do is relax in your new home sweet home.