Owning a home is a wonderful life achievement, but getting in over your head financially will quickly crumble all you have worked so hard to achieve. When you purchase a house, you need transparent knowledge of the full scope of costs.
There is much more to purchasing a home than the list price, and too many young homeowners overlook all of the added costs of home ownership until it is too late. Don’t allow yourself to drown in unmanageable debt, and educate your mind on what home ownership really means for your bank account.
When you first purchase a home, you have an idea in mind of what it will take to get the property into the kind of shape you envisioned. The problem is that most home rejuvenations never go as planned.
You cannot see what is hidden below the surface, and one problem may lead to another, worse problem. Setting a budget for home repairs is great, but do yourself a favor. Create a contingency budget alongside the initial financial planning.
You probably thought about mowing the lawn and cleaning the gutters on your new home, but did your financial plan include replacing the heating or air conditioner unit? There are many home maintenance costs that can rack up a sizeable bill.
Since you can’t really plan for your HVAC unit to break down, the best way to make sure you can afford your home is to over budget on everything. The worst that could come of over budgeting is that you have a little extra money in the end.
If your payment calculations for your mortgage only include the principle and the interest rate, then you are under budgeting for the cost of owning your home. Property taxes are a required added cost to consider.
You should look into what the property taxes will cost you before deciding whether or not you can afford a particular property. Remember to account for a rise in property taxes, as the rates are not set in stone.
Owning a home without having an insurance policy on it, should something bad happen, is a perilous plan. A wise homeowner invests in a solid insurance policy to protect their future on the property.
If you purchased an old house, you should understand that your insurance coverage will cost a little more. Old wiring and plumbing can add up to an expensive bill, and insurance companies are very familiar with the slippery slope of older homes.
When you own the place in which you live, there is no calling the landlord to spray when you see a random bug in your house. You have to foot the bill for pest control, and it is not super inexpensive.