Homeownership Expenses You Might Not Anticipate
Purchasing a home is an exciting time, especially for first-time buyers. However, the financial commitment is sometimes overwhelming.
Beyond the standard mortgage, taxes and insurance calculations, homeowners inevitably face unexpected fees, repairs and lifestyle adjustments when settling into their new homes. A few financial bloggers were asked to share their experiences and advice on the expenses of buying and owning homes.
What was the most unanticipated expense of buying your home?
Two years ago, we purchased our home in New York after owning homes in Georgia and Florida, and we were surprised at how much higher our closing costs were in New York versus the other states. The biggest surprise was the lawyer fee we were required to pay. When we purchased homes in the past, everything was handled through the escrow agent, and additional legal fees were not required. — Shannon McLay of Financially Blonde
What are the most surprising expenses you encounter as a homeowner?
The surprising expenses are seasonal: decorating the house for the holidays, planting flowers in the spring, home projects in the summer. While it’s easy to think about the weekly and monthly routine expenses, those are more difficult to plan around. — Joe Saul-Sehy of Stacking Benjamins
Which bills increased when you became a homeowner?
Condo fees and heat! When we were renting, our landlord paid for heat and hot water. Let’s just say, now that we’re homeowners we’re taking shorter showers and wearing more sweaters in the winter. — Student Debt Survivor
What is the most expensive cost of owning a home vs. renting?
The answer has got to be maintenance. We would never have had to buy a new roof as renters, but we had to pay approximately $15,000 for the entire roof to be reshingled. The others would to have new landscaping put in ($7,000), and all windows, which were installed in 1961, were replaced with double-pane windows ($15,000). Ongoing expenses, like utilities (natural gas, electricity, water, trash), gardeners, property tax, and insurance are not all that costly, but they add up over the course of a year to just under $10,000. — Save and Conquer
How did your budget change after buying a home?
We were very aggressive with saving our money prior to buying our house. We were saving over 50 percent of our income. We didn’t go out very often, and we tried to eat at home. We bought a fixer-upper because it was in a better location and the price was more affordable than new builds. DIY Network and Pinterest make DIY updates seem so easy and affordable. Prior to homeownership, we never had to worry about paying for repairs or really about updating our apartment. We were renters. Now, I have to make sure any purchase fits in our budget. I’m also saving for bigger improvements like the patio. Instead of going shopping for clothes and shoes, I’m allocating that money to Lowe’s or Home Depot! So far, we have had to call a plumber to fix a leak, the exterminator to exterminate, and now, our garbage disposal is broken. $100 here and there adds up. — Savvy Financial Latina
What advice can you offer prospective home buyers beginning their shopping experiences?
Transitioning from a renter to a homeowner can be an expensive endeavor. You need to have much more money in your emergency fund to cover various things that can go wrong. Don’t forget to budget for property taxes, home insurance, repairs, HOA fees, utilities, furnishing and landscaping. There are many more expenses when you’re a homeowner. — Retire By 40
What saving strategies did you use to prepare for the expenses of homeownership?
I’m not sure if it’s a savings strategy, but whenever my wife or I wanted to spend on certain things, we’d say to ourselves, “We’re saving for a house.” That helped us focus on our priorities and goals, and not spend on things that we might have otherwise. I think it is also important to try living on your future budget as a homeowner to ensure that you can afford to buy a house. — Living Rich Cheaply
What financial concerns do you have about purchasing a home now?
My main reservation is that I don’t know how long I plan on staying in one area. I still want to travel the world before I buy. When I’m ready, I’ll create a realistic budget for a home and stick to it. Too many people create a budget and go over, and then fail to realize that they still have to pay property taxes, property, insurance and more. — Alexis Schroeder of FITnancials
How can first-time buyers financially plan for the total costs of homeownership?
Save as much money as you can. If you’re able to save for a 20 percent down payment, that’s even better. Once you move in you’ll be amazed at how often something will need your attention. That will generally take money. Go in with having money set aside to cover things that might pop up. You should also put money aside each month to cover those things. You might feel it, but the last thing you want is to be surprised by an expense and not be financially prepared for it. — John Schmoll of WiseDollar
Read the original article by Tali Wee on Zillow’s Blog.
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