New buyers can be caught off guard by the costs of owning a home. Here are some top home expenses to consider before buying:
In addition, there may be HOA dues, and many buyers find they need more furniture or other upgrades. The first year of homeownership can get costly, so make a budget and stick to it.
Buying a home can be exciting. Still, coming up with the initial money needed isn’t easy. The first goal is to afford the upfront charges, like the closing costs. But your financial duties won’t stop there. That’s why it’s important to understand the true costs of owning a home before buying.
Owners need to cover an array of continuing expenses. This starts the very first year of ownership. These include property taxes, insurance, repairs and upkeep. And their costs can vary widely, depending on your home and location.
Know what you’re getting into before committing to a purchase. Crunch the numbers and forecast the costs. You want to ensure that your future earnings and savings will cover these outlays.
There are two different types of costs owners face.
“The first is one-time costs you’ll face the first year. Among these are the down payment, closing costs, inspection fees and appraisal,” he says. “Then, there are ongoing costs that buyers need to prepare for.”
Ongoing costs you’ll pay for starting your first year can include:
These expenses can add up quickly. In fact, the average homeowner pays an extra $9,080 every year for unexpected or forgotten costs like those listed above.
The total median monthly housing (TMMH) costs can vary widely by area. Markets that pay the most include San Jose, San Francisco, Anaheim, San Diego, Los Angeles, Northern New Jersey, Washington, D.C., New York City, and Boston. TMMH costs in these metros range from nearly $1,700 to over $2,400.
Some of the most the most pricy costs of owning, on average include a:
When buyers first purchase, things like the age of appliances and the HVAC system are often overlooked. And landscaping, painting and general upkeep are tasks that can be costly, too.
You may not have to worry about many of these duties your first year. But it’s smart to think ahead when factoring the long-term costs of ownership. For example, consider how long you can expect the appliances, systems and components to last.
These collective costs may sound scary. But don’t let this “true math” deter you from buying if you can afford to own.
Owning requires more periodic cash expenditures than renting. But owners enjoy benefits. These include potential appreciation in home value and equity buildup as they pay down their mortgages. These profits can be converted to cash by a future sale or loan refinance. And that makes the overall deal a good investment, so long as you can supply the long-term cash.
Consider that an average homeowner’s net worth far exceeds an average renter. In fact, per the Federal Reserve, the median net worth of the former is around $231,000 vs. about $5,200 for a renter.
That marks a 15 percent increase for owners and a 5 percent decrease for renters since 2013.
Contact a Wallick & Volk Mortgage Professional today to get Pre-Qualified. www.wvmb.com