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8 Homeowner Expenses to Budget For Every Year

Owning a home is a huge accomplishment, and it comes with an array of financial obligations. If you’re a new homeowner or you’re looking to buy a home, here are the 8 most common homeowner expenses to budget for. 

1 – Taxes

Property taxes rank among the largest encumbrances for homeowners. Local counties and towns levy property taxes based on the assessed value of homes to fund public services like fire departments and schools. 

Since property taxes are in the hands of local governments, rates vary by location. To ensure that you don’t get caught off-guard by this expense, consult with your agent about your local tax rate.

2 – Mortgage Insurance

Private mortgage insurance is a policy that protects lenders from the risk of a borrower defaulting on their payments. If your down payment was less than 20% of the home’s cost (and you’re using a conventional mortgage), your lender will likely require you to purchase private mortgage insurance. The cost of your PMI policy depends on several factors, but you can generally expect a rate between 0.5% and 1% of the loan each year.

Mortgage insurance offers the same protection to lenders for federally-insured loans like Federal Housing Administration (FHA) loans. All FHA loans where you put less than 20% down will require mortgage insurance. Fees for government loans depend on the type of loan and how much money you own. 

3 – Home Repairs

In today’s current market, it’s common for buyers to waive their inspections in order to make their offers more competitive. But, this often leads them to have to make major repairs to the property. Those repairs can be costly, especially for foundation repairs, roof replacements, water damage repairs, and HVAC replacements.

4 – Home Warranty

Something that can help you combat the costs of major repairs is a home warranty policy. Warranties differ from home insurance policies in that they cover the costs of repairs for internal systems to your home (like plumbing, electrical, and HVAC units). 

5 – Homeowner’s Insurance

Homeowner’s insurance is necessary for such a big purchase, and it insures your home’s structure and your belongings in case of a destructive event. Some policies even protect homeowners from liability, which is the legal responsibility of the owner in the event of injury or property damage caused by the homeowner or their family.

6 – Landscaping Maintenance 

Outdoor spaces have become extremely popular in recent years. But, you may be surprised by the cost of maintenance for outdoor spaces. From lawn care to gardening and other maintenance, it can cost from $100-$200 per month. 

7 – Minor Home Repairs

The cost for minor home repairs can add up quickly. These minor repairs include tasks like replacing flooring, fixing faulty wiring, and any upgrades you make to broken appliances. But, taking these minor repairs head-on can save you from higher costs down the line. 

8 – Homeowners Association Fees

Buying a home in a homeowners association (HOA) can have benefits. HOAs help the community maintain property values by establishing guidelines for home aesthetics and upkeep. HOA fees can help cover HVAC maintenance, roof repairs, trash pickup, snow removal, cleaning, and painting of building exteriors. 

These benefits come at a cost in the form of monthly, quarterly, or annual fees. These fees can range anywhere from $200-$300 per month depending on the size of your community and the amenities the HOA offers. 

Instead of being deterred by the costs of owning a home, connect with an agent today. The advantages of homeownership far outweigh the costs, so lean on the advice of experts to help you through the process. 

Team Melton has over 50 combined years of real estate experience to assist you through every step of the process. Contact us today to get started on selling your home!

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