You've found the home of your dreams. You have a pre-approved, fixed, low-rate home loan. You have your 20% down payment ready. You've calculated your monthly payment and it will fit nicely in your monthly budget and still allow you the freedom to enjoy life.
Sounds like you have it all planned out right?
Don't forget about the homeownership costs that you may not have planned for. Here are a couple of additional costs that need to be considered when taking the leap from being a renter to being a homeowner.
Utilities: You probably budgeted for utilities based on your last home. Most people usually move up and get more space when they purchase a home. Don't forget, with all that extra space, comes higher utility bills. You need to use more power to heat and cool that additional space.
Appliances: If you purchase a new home, you will also probably need to purchase a washer and dryer, stove, refrigerator and possibly a microwave. When I purchased my home, I purchased directly from the builder and part of the incentive to purchase the home, they included an appliance package. This saved me thousands of dollars that I had not considered as part of the purchase. If you purchase an older home, all these items may need to be replaced as they may have completed their intended lifespan.
Window Treatments. This is one of the costs I certainly did not account for. Each window in my home needed some kind of window treatment. I did not want curtains on all the windows so I had to purchase blinds for each window. This cost was not considered and quickly added up.
Repair and Maintenance. This cost can vary based on the age of your home. If you were previously renting, you were probably used to calling the landlord and having problems fixed without any money out of your pocket. As a homeowner, you are the landlord and will need to pay for any problems that may arise. Even if you have a new home, repair and maintenance issues will still come up. Did you have a pipe burst? Get ready to come out of pocket to pay for it. One good way to lessen the pain of repairs and maintenance of your home is to set aside a set amount of money each month in a repair fund account. Now when a repair comes up, you are not relying on credit or trying to figure out where to get the money to pay for the problem.
Yard Care. Depending what type of home you have, you will probably be responsible for your yard maintenance. If you live in a condo or townhome or have a homeowners association, this is something you may not be concerned about. Responsible for your own lawn? Get ready to buy a lawnmower, trimmer, chainsaw, blower and possibly a pressure washer to keep things nice and clean. One tip to save money on these items is to visit a pawn shop. I saved a bunch of money buy going to a pawn shop for all these things when I bought my first house.
Homeownership is a wonderful thing; you just need to make sure you are financially ready to take on the responsibility.
This was a group project organized by Rocket Finance. Visit Rocket Finance to view all the home related posts.
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