Before the first thing in your house even breaks, there is going to be something that you want to change because this is YOUR HOUSE and when people see YOUR HOUSE, you want them to know that you have taste. Plus, if you live in a flood zone, earthquake zone, tsunami zone or volcano zone, you’re going to have to pay extra for hazard insurance.Ĥ. Wait, did you fall behind on credit-card payments during the recession but thought you were in the clear because you always paid your mortgage? Well, guess what: Insurance companies can periodically check your credit score and raise your rates based on their assessment of your “risk” level. Thought you saved more by buying an older house? Well, guess what: It’s going to cost more to insure it because the electrical, heating and plumbing are older and more prone to disaster. And, there are a lot of factors to consider when it comes to insurance. So even if you had renters’ insurance, you’re going to have to up the budget for insurance. It costs a lot more to insure a home than, say, a one-bedroom apartment. You need to find out what the taxes are in advance (they’re usually on the MLS listing), divide it by 12 and immediately add it to your estimated monthly payment.Īnd remember, the taxes are just going to keep going up - you could even get a tax increase in the first year you own your home - so make sure you have room left in the budget to pay even more taxes.ģ.
But if you’re only plugging in the principle and interest rate into your mortgage calculator, you’re missing out on a huge expense right out of the gate - property taxes. For that, I could be paying a mortgage and own my own place!” Well, yes. You might think - “I’m paying $1,200 in rent. “I suggest people make all financial decisions with their head - and leave their heart out of it!” Cunningham advises.Ģ. “That can put them on a very slippery slope.” They get emotionally involved with the property,” said Gail Cunningham, vice president of public relations for the National Foundation for Credit Counseling.
“Oftentimes, homeowners make the largest financial decision of their lives - buying a home - with their heart, not their head. You may set a budget for how much you can spend on a new house, but then you find something you love - something you can’t stop thinking about - and even though it’s $50,000 or $100,000 over your budget, you buy it anyway. To help you get prepared, here are 20 Hidden Costs of Home Ownership.ġ. “When the toilet starts flooding, you can’t call someone like you did when you were renting. “Most people are unprepared for the big repairs - and even the small repairs,” said Guy Cecala, publisher of Inside Mortgage Finance magazine. They soon discovered that their neighborhood is prone to power outages, so they needed to consider dropping $10,000 for a backup generator. Then, the air conditioner went on the fritz. Then they had a baby girl! It cost an estimated $10,000 for the first year of a baby’s life, according to this baby calculator. Two months after they moved in, a FedEx truck accidentally backed into the house, damaging the gutter.
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