Buying a new home – Consider a few expenses
Interest rates remain extremely low, and according to Trulia’s most recent Trends Report, homes are affordable for the middle class in 80 out of the 100 largest metros. If you’re thinking of buying a home this summer or next year, you’re committing to costs both upfront – and when you are a homeowner. You need to be prepared know exactly what those costs are.
When you decide to buy, the most important thing is determining what you can afford.You also need to think about the big picture..
1. Your Mortgage
You will know your monthly payments, that will be based on the price of your home.
2. Property Tax
Property tax laws are state and county driven – typically about 1 percent of the assessed value.
3. Homeowner’s Insurance
Insurance depends on your location and the coverage you want, insurance can run you anywhere between $500 and $1,500 a year. You can bundle your homeowner’s insurance with auto and life for discounts.
4. Hazard Insurance
Do you want or need earthquake, flood, or hurricane insurance, depending on what area of the country you live in.
5. Homeowners Association Fees (HOAs), Condo, Co-op Fees
If your home is in a community with a homeowners association or own a condo, co-op, or town house, you’ll pay an annual or monthly fee to maintain the building and grounds.
Water, sewer, and trash, electric and gas – you paid these anyway as a renter, they may be a bit higher as a homeowner.
7. Routine Maintenance
Set aside some money every month for these “unexpected” expenses. Things break and wear out, hot water tanks, furnaces and roofs will eventually need to be replaced.
Mowing the lawn, trimming bushes and trees, you nay want to hire someone if you are too busy.