8 Homeownership Fees to Consider Before Buying Your First Home
Buying your first home in the greater Austin area is a huge financial commitment – probably one of the most significant of your life. To prepare you for this major milestone, here are eight homeownership fees to consider before buying your first home:
While you may no longer have rent payments, you do have a mortgage payment. Before beginning the home search, determine how much home you can afford. The best way to do this is to consult a mortgage lender. They will look at your financial situation to determine what you can reasonably afford. Use this number as a starting point, then consider YOUR financial situation and what you can actually afford. Keep in mind; these numbers may not match. ALWAYS go with the number you can actually afford – you don’t want to buy a home only to realize you can’t afford to make the monthly mortgage payments a couple of months down the road.
Often overlooked by many new homeowners, property taxes vary by state and are typically paid twice a year. Why are they overlooked? While you do pay property taxes living in an apartment, YOU are not responsible for making the payments – the apartment complex includes those costs in your rent. As a homeowner, YOU are responsible for paying the property taxes directly to the state. If you are paying a mortgage, most mortgage companies will require you to have an escrow account where you pay money (often part of your monthly mortgage payment) to be held to pay the property taxes and insurance.
Varying by state and region, homeowner’s insurance can cost anywhere from $500 to $1,500 a year. To keep costs down, consider bundling your homeowner’s insurance with your auto or life insurance.
Homeowner’s Association Fees
The neighborhood you live in will likely require association fees for community features (pools, parks, etc.) and maintenance (lawn care, etc.). Ensure to factor this number into your budget – homeowner's association fees can be monthly, quarterly or yearly.
Every homeowner expects to pay utilities – the mistake most buyers make is the value they expect to pay. Utility bills in an apartment are much cheaper than that of a house. As a new homeowner, expect your electric and water bills to increase and figure you will now be paying several utility bills you didn't when you lived in an apartment (sewer, trash removal, etc.).
Renovations and Repairs
Owning a house means taking the responsibility of paying for your own renovations and repairs. When buying a home, take note of all the immediate improvements and repairs that you need to complete – and before signing the final documents, ensure the costs of completing the repairs fits into your budget.
Gardening and Yard Maintenance
As a homeowner, you now get to enjoy a front and backyard. While this is one of the great qualities of a home, keep in mind that you will now have to maintain your yard and garden. Also, depending on your neighborhood, you will have to keep your front yard in good looking condition – for curb and community appeal purposes.
Moving Expenses and New Furniture
How much stuff are you moving? Do you have enough furniture to fill your home? Consider both moving and new furniture costs when moving from one location to another.
Be proactive and estimate all of these homeownership fees along with your income and daily living expenses before signing the final documents to buy a home. Your budget and sanity will be glad you did!
Are you looking to buy your first home in the Austin area? I would be happy to help! Give me a call anytime.
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