How to spot the hidden costs of owning a home

If you’re want to buy your first home, and you’ve done your basic homework, then you probably already know at least a little about down payments, mortgages, credit scores and credit ratings, and the other big-ticket financial commitments that are involved. But more experienced homebuyers who’ve been through the process more than once will tell you that there are a lot more costs involved in owning a home. And that being surprised by them can be quite stressful. Here are a few that you should prepare for by factoring them in to your house-buying budget:

Monthly maintenance and repairs always seem to cost more than anybody anticipates. But they’re essential to protecting what is likely to be the biggest investment in your life. A rule of thumb is to count on $50 a month if a home is less than $100,000 in price, and $100 a month for a home that is more than $100,000. Of course, these dollar figures are only guidelines—the cost of maintenance and repairs entirely depends upon the condition of the home you buy.

Moving and transportation costs can range from reasonable to really outrageous, depending on how far you’re moving, how much stuff you have, and how many people are involved. If you’re moving a considerable distance, don’t forget to consider costs of hotels, meals, gas, packing boxes, moving vans, any storage fees, and utility stop/ start fees and deposits, etc.

Property taxes can take a major bite out of your budget. And they always seem to go up—never down. In a positive light, you can look at rising property taxes as an indicator you that you made a good investment in buying a home. But you need to be prepared and have the money set aside so you can meet your tax obligations without undue worry. For a newly constructed house in South Texas, it’s a good idea to put aside at least $2,500 for homes less than $150,000. Another way to figure it is to calculate at least $3 per $100 of the purchase price.

Electrical energy bills can skyrocket, especially during our long, sunny Rio Grande Valley summers, which require air conditioning. On a positive note, heating bills tend to be lower in our part of the country because of our mild winters. What’s the best way to anticipate what your monthly bills might be like? Contact the local energy utility company and ask for examples of what the 12-month range of payments is on similar homes in the neighborhood. And also take a long, hard, realistic look at your own lifestyle and how it impacts energy consumption.

Basic home décor costs really depend on your own individual taste, preferences, and needs. If you’re moving from an apartment into your first home—especially with an upgrade in the amount of space—then you will likely need more furniture, draperies, some major appliances, etc. You will have to decide whether or not you can afford to get it all at once, or acquire it little by little. But no matter what you do, put aside at the minimum, the equivalent of one month’s mortgage for basic home décor when you first move in to your new home.

Lawn and garden maintenance vary from home to home, obviously. But keep in mind a lawn must be mowed regularly, whether you do it yourself or pay someone else to do that chore. Then there’s the cost of a lawnmower and edger, those monthly water bills, various types of garden products and tools, fertilizer, landscaping components like plants, trees, flowers, and so forth.

Homeowner Association fees and/or covenant fees can come into the picture if you live in a planned, restricted, or gated community. Be sure you know how much these fees are and what they do or don’t cover.

Homeowner’s insurance is essential. You can’t do without it. Be smart and look into different kinds of policies and costs. Compare costs versus coverage versus the policies offered by different insurers before you make your decision.

Unexpected calamities occasionally do happen. A tree could come crashing through the roof because of a storm. A water line could break...you just never know. But if you’ve put money aside for such circumstances, it’ll be much easier to get through the situation if you don’t have to worry and stress about how you’re going to pay for repairs and replacements.

So there you have it—just a few of the most likely places where George could be hiding out in the home you want to buy. Make sure that you can afford to deal with him when and wherever he shows up.

Article Source: http://www.propertymagnate.com/articles

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