Homeowner Costs

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.

Click here for previous posts.