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October 1, 2021

Expenses to Expect After Purchasing a Home

Know what costs homebuyers should expect to maintain a home.

Homeowners have many advantages and benefits by owning their own home including building equity, having stability, and owning an asset that can be enjoyed by their family. However, hidden expenses like maintenance and taxes can add up quickly. Being prepared to handle these additional costs can create less stress and allow you to be more financially prepared for the future.

Largest expense: mortgage payments

After the down payment, monthly mortgage payments are the second most substantial payment that is made towards the purchase of a home. It is possible with refinancing or changing interest rates that mortgage payments can fluctuate over time, so be prepared to meet the monthly payment if it is increased.

Property taxes

All homeowners owe property taxes which are determined by the city or county where the home is located. The amount owed per month is calculated according to home value and according to the national average; you can expect it to be around 1.1% of a home’s total value.

Homeowners’ association or other neighborhood fees

Being a member of a neighborhood can have many perks, but these amenities come with a cost. Homeowners’ association fees (HOA) cover services such as garbage collection, snow removal, security systems, and more. Be aware of the monthly costs and whether new improvements such as road construction could drastically increase the cost.

Homeowners’ insurance

Expect to insure your home, your largest asset, as a requirement from banks who issue your loan. Homeowners’ insurance will typically cover typical home damage but disasters such as floods, hurricanes, and earthquakes will require another policy.

Property maintenance

Having a well-kept lawn is not only important for looks but also for your safety (and may be required by your HOA.) Overgrown tree limbs can damage structures or fall during a storm. Leaves can clog gutters which caused drainage issues. Invest in a well-maintained property to prevent damage and keep your neighbors on your good side.

Structure maintenance

Homeowners should expect to face a plethora of costs to insure their home value is maintained against wear and tear. Some of the largest possible costs are replacing the heating, ventilation, and air conditioning system (HVAC) as well as paying for inspection costs. Roof maintenance is another large and inevitable cost that can face homeowners; an asphalt shingle roof should be replaced every 10-15 years.

Want to better plan for unexpected home expenses? Visit your local Citizens First Bank to find out how you can begin planning for your future today.