One of my goals for the next month is to post each day of July about a List of 10 dealing with a personal finance or money saving idea topic.
For many, the “American Dream” is to own a home of their own. For others renting is a better fit. Here are 10 expenses to keep in mind when shopping for a house. When determining how much you can afford to pay each month it is important to keep these things in mind. Some think if they can afford a certain amount of rent, they can afford that much in mortgage payments. As you can see below there are additional expenses besides the mortgage payment.
1) Mortgage payment – will include payment towards the principal, interest, and in many cases insurance costs and taxes.
2) In most cases you will need a down payment and will need money at the time of closing for closing costs such as appraisal fee and other mortgage costs.
3) Before you start looking for a home, consider how much you can afford. Even if your are preapproved for a certain amount, decide if you are comfortable spending that much.
4) Homeowners insurance – if you were renting, you probably had renters insurance to cover your personal possessions but now you will need to have homeowners insurance to also cover the structure.
5) Utilities – when you were renting you may have had some utilities covered in your rent. Now you will have electric/gas, water, garbage service, etc. It is important to keep in mind your utility expenses may vary from month to month depending on heating and air conditioning costs.
6) Repairs – If something breaks instead of calling the landlord you will either need to fix it or hire someone to fix it.
7) Updates - You may also need money for updates or to replace appliances.
8) Lawn care and snow removal – you will either need to buy a lawnmower, snow blower, etc or hire someone.
9) If you are moving into a larger home you may need to buy more furniture. Or as in many cases, think you need new furniture for your new home
10) If you purchase a condominium or a home in a development you may have monthly condo or Homeowners Association fees. These may cover lawn care, snow removal and other items.
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