One of the biggest obstacles to owning a home has to do with making your monthly mortgage payment. Your monthly mortgage amount generally includes payment of principal, interest, taxes and insurance, however, there may be other expenses due monthly. Whereas, when you were renting, you could write one check which covers all of your expenses, and be done with it. There are a lot of things that go into identifying all of the monthly expenses associated with owning a home.
You already know how your mortgage payment breaks down, but there are other monthly expenses associated with owning a home outside of what’s bundled in your monthly mortgage bill. For example, you may be expected to pay homeowner’s association dues, or HOA dues. These are a monthly fee that go towards maintaining amenities and the surrounding property of your home, and are usually associated with condos, though some homes are part of a homeowner’s association. These fees may be collected every month, every quarter, or once per year, depending on your HOA’s schedule.
Monthly utility costs are also something you’ll want to budget for, as these aren’t rolled into your mortgage payment. Some of these payments may include gas, water, electric and trash removal, among other things. You can always ask the previous owners of your home what their utility expenditures were to help you budget for these monthly costs accordingly.
Additionally, consider setting aside money for regular maintenance needs, emergency repairs or otherwise. Remember: you’re a homeowner now. If something breaks, leaks, or falls apart, the onus is on you to repair it. Of course, no one has a crystal ball to determine what might break down or when, but it’s still smart to have a financial cushion in case something falls apart. Consider maintenance issues as you’re going through your appraisal and inspections, and speak with mortgage professionals that are trained to identify potential problems that may surround your potential new home, and can warn you of any red flags.
Becoming a home owner is a big step, and one that can seem daunting when you’ve just made the leap from renter to owner. But with a little forward thinking and some healthy financial planning, you can be more than ready to take on the monthly financial responsibilities that come with owning your own property.