Homeownership is a financial milestone, so most people do extensive research before buying a home. Zillow and Thumbtack released a joint study that suggests that the average homeowner spends almost $10,000 a year on “hidden costs” beyond the mortgage payment. What are some of those costs?
Taxes And Utilities Add Up
Depending on your former living situation, the total cost utilities, such as electric and water bills, can be more expensive for homeowners than renters. Some homes are less efficiently insulated than apartment buildings, which can cause unexpectedly high bills.
Property taxes are just as important as the mortgage payment because you can lose your home if you fail to pay property taxes. These taxes are an annual expense that can cost more than $10,000 in the most expensive cities.
Insurance Is Part Of Your Mortgage
Mortgage lenders often require home buyers to purchase homeowners insurance. Depending on the terms of your mortgage, the annual costs of your homeowner’s insurance will usually be divided into your monthly mortgage payments.
This means that homeowners insurance is not optional, and it will increase the monthly cost of owning your home. Homeowners insurance should be considered when you’re calculating the cost of owning a home.
Maintainece Is An Unlimited Cost
If you own a home, it is solely your responsibility to maintain it. It is only natural for the home to need repairs and replacements over time. Paint, carpets, and roofs will all need to be replaced after several years. If any appliances break down, you’ll need to foot the bill for a new one.
There is no limit to how expensive keeping your home livable and desirable can become. Owning a home gives you an asset and financial leverage, but you need to understand all of the costs before buying a home.