The main things people focus on when buying their first home is saving for a down payment, worrying about our credit and interest rate, paying the mortgage off and decorating. There are several other costs that factor into the monthly expense of a home that are frequently overlooked.
Some of the most overlooked expenses are:
- Homeowners Insurance: You want to get the best coverage you can afford. If you have a mortgage most likely the broker will require a certain amount of coverage. That is to protect them in the event of a loss while they hold the title to your home. To fully protects yourself though you want to insure your homes total replacement cost, not just the market value. What this means is that you want to have enough coverage to rebuild in the event of a disaster and replacement all of your belongings inside.
- Flood Insurance: Depending on where you live you may need to also have flood insurance. The rates on this can vary based on the age of your home, your proximity to water and the current changes to FEMA maps. To read more about this please click here.
- Association Fees: Many communities and condo’s will have monthly or quarterly dues to help maintain all of the amenities you get to use while living there. Always find out about this and factor into your budget because many communities and associations will put a lean on your home if you do not stay current with these fees and it could result in a possible eviction.
- Repairs & Maintenance: Whether the house be older or newer, there will be times where you need to repair things and keep other’s up to date. These costs will vary depending on the economy and demand. There will be times where you need to replace major parts of the home, like the roof for example or may want to repaint your home.
- Upgrades: When you walk into your possible new home everything looks perfect. Then you buy, and move in and realize you want to change things. While in most cases this will add a lot of value it will also be costly depending on what you want done. Always be aware that no matter how much you love it on day one, a year later you may want to make changes.
- Furniture: When moving into a new home, especially if you are coming from a smaller apartment or somewhere else, it is easy to not realize that you may need to purchase items that fit the home better or fill it. This is not the most important expense but it is one to consider when purchasing a home or upgrading.