Unfortunately, a lot of folks around the U.S make the decision to buy a home without actually doing their due diligence beforehand. The fact is, there are a whole heck of a lot more expenses than paying a mortgage payment that come along with owning a home. It doesn’t really matter if you are looking at real estate in Hinesville, GA or properties in the nicest areas of Greenwich, Connecticut; there are going to be expenses that you may not know about. Let’s take a look at a few of them below:
Mortgage Payment – This is the payment that everyone knows about, but what a lot of folks don’t know is that during the first half of your mortgage, a large amount of your monthly payment will go towards paying off your interest. This means that you will be building very little equity in your home. If you make a $2,000 mortgage payment, and $1,900 of that is interest, you’re only going to be building $100 of equity each month.
Homeowners Insurance – You may not ever get to use it, but every homeowner needs homeowner insurance in the event that something unforeseen and tragic happens to your house. This kind of insurance can be pricy, so shop carefully.
Property Taxes – You can expect to shell out up to a few thousand dollars a year for property tax, unless you live in a horrible section of town, in which case you should beef up your homeowners insurance.
Maintenance – If your hot water heater breaks, don’t expect your landlord to come running to your place with his toolbox in hand, ready to fix the problem. If you own a home, you’re on your own as far as maintenance costs. Most realtors and agents recommend having one percent of the price of your home saved for these necessary costs.
Hopefully this short guide has clued you in on a few expenses that you can almost assuredly plan on paying when you own a home. The bottom line is this: if you can’t afford it, don’t buy it.