Hold on to your excitement about finding a house! Before you break out the celebrations, let’s talk about how much it really costs to own a home. In this blog, we’re here to be your budgeting pals, showing the hidden costs of homeownership. We will provide you some info that’ll help you navigate the financial side of moving into your new home smoothly.
Before that, if you’re a first-time homebuyer and feel stuck, here’s how to get started.
Property Taxes and Assessments
Homeowners have to pay property taxes regularly. The amount you pay depends on how much your home is worth and the local tax rate. Make sure to find out the property tax rates where you want to live and include them in your monthly budget. It’s a good idea to talk to a tax professional or local authorities to figure out exactly how much you’ll need to pay.
Diving into property taxes can be a bit overwhelming, but here are some straightforward tips to keep things in check:
- Research Local Property Tax Rates
- Include Taxes in Your Monthly Budget
- Plan for Possible Increases
- Understand Assessment Methods
- Consult with Professionals
- Save for Escrow (if applicable)
- Budget for Special Assessments
Learn more about property taxes here.
Having homeowners insurance is really important to keep your investment safe and your finances secure. The cost of insurance depends on things like:
- Where your home is
- How big it is
- What it’s made of
- What kind of coverage you choose
Look into different insurance providers, get a few quotes, and think about bundling your home insurance with other types of insurance to save money.
Here’s how insurance works.
Maintenance and Repairs
Taking care of a home is an ongoing job. It’s important to budget for regular maintenance, fixing things, and getting new stuff when you need it. Put some money aside in your monthly budget for things like getting your heating and cooling system checked, cleaning your gutters, and taking care of your yard. Also, have some extra money in an emergency fund in case something unexpected comes up, like a leaky pipe or a problem with the roof.
Need some practical tips for home maintenance and repairs? Well, we got you!
- Put aside some money each month in your budget just for taking care of your home.
- Look at important stuff like your heating and cooling systems often. Regular checks help catch problems early.
- If you notice something needs fixing, don’t wait. Fixing things quickly stops them from becoming bigger, more expensive issues.
- Think about what your home needs in each season. Clean gutters in the fall, check your heating in winter, and take care of your yard in the spring and summer.
- Have some extra money saved up just in case something unexpected happens, like a leaky pipe or a roof problem. It’s like having a safety net for your home.
Read more about the resolutions every homeowner should consider on our most recent blog here.
Homeowners Association (HOA) Fees
If your new home is part of an HOA, be prepared for monthly or annual fees. These fees contribute to the upkeep of communal areas, amenities, and sometimes include services like landscaping or trash removal.
Read more about HOA fees and how it works here.
According to a report from the U.S. Energy Information Administration (EIA), the average monthly energy bill in Michigan is $143.41. This is a lot higher than it was a few years ago and makes Michigan the 12th state with the most expensive energy bills in the U.S. On average, people in Michigan pay a total of $410.72 per month for all utilities combined. Compared to other states, Michigan is right in the middle, ranking 30th in the U.S.
If you’re interested in learning more about the cost of living in Michigan, you can find additional information here.
Unexpected Home Repairs
Lots of homeowners start projects to make their space unique or boost its worth. Whether it’s redoing the kitchen or adding a new deck, planning and budgeting for these improvements mean you can upgrade your home without putting too much stress on your finances. Dave Ramsey says to have at least $1000 saved for an emergency fund.
Need some inspo? Read more here.
While the purchase price is a big deal, it’s these ongoing, somewhat hidden costs that really add up. Being aware of them and budgeting accordingly lets you enjoy your new home without stressing about money. Think of this guide as your roadmap to handling the financial side of homeownership like a pro!
See how much house you can afford using this free mortgage calculator!