Financial Moves To Consider When Owning a House

Owning a home is the American dream, but unexpected expenses can turn it into a nightmare. Banks want to ensure you can meet your monthly mortgage payment, but you also need to plan for more expenses than renters have to worry about.

Property Taxes

Your annual property tax assessment will vary depending on where you live. Find out what you’ll pay every year, which is always subject to increases each year. Set aside money every month to cover your property taxes, because if you don’t, you could lose your home. People who don’t pay their property taxes may have their homes put up for auction if they don’t make arrangements to pay them. Some municipalities let you make monthly or quarterly payments, which makes it easier to budget.

HOA Fees

If you live in a community with a homeowners’ association, they typically charge monthly fees. These fees cover things like a manned gate, a community pool, snow removal and more. Besides investigating the HOA fees, check the rules you will have to follow. Deviating from them means you could incur fines.

Homeowner’s Insurance

Most mortgage companies require you to maintain homeowner’s insurance. If your mortgage company does not, it is essential to have it anyway. It’s important to know what the coverage includes. Many policies cover fire, but not cover floods and other natural disasters.

Higher Utility Bills

If you’re moving from a rental apartment where one or more of your utilities were paid, the costs can surprise you. Even if you paid all your utilities, a larger house will be more expensive to heat and cool, plus you are likely to use more water if you have additional bathrooms or have more square footage to clean.

Lawn Care

If a house with a huge front and back yard sounds ideal, consider the costs of maintaining it. You will have to purchase a lawnmower if you don’t already own one and keep gas in it. If you’re not up to maintaining your lawn yourself, you’ll have to pay someone to do it. If there are trees in your yard, you’ll have to maintain them, including trimming branches that may overhang a neighbor’s yard, remediating storm damage and cutting down dead trees, especially if they could fall on your home.

Snow Removal 

Depending on where you live, snow removal is an extra winter expense. If you have a long driveway or cannot physically shovel your walkways yourself, you will have to hire someone. Also, you’ll need rock salt or another ice melting material to keep your walkways from freezing. You don’t want yourself or a visitor to slip and fall.

Pest Control

Even the cleanest homes can get pests. You could bring home bedbugs after a hotel stay or see termites eating away at the wood in your home. Set aside money for professionals to remove the pests.

Home Maintenance

When you own a house, there will always be something that breaks. The roof is probably the most expensive item to repair, but you have to do it if your roof begins leaking as it will affect every other part of your home. Plumbing and electrical issues are also expensive to repair. Even if you’re handy and can fix a broken pipe yourself, you will typically need to buy the tools and supplies.

Extras

If you buy a home with a beautiful wooden fence for privacy, the fence will need maintenance. It will need staining and sealing every few years. Even well maintained fences will eventually decay and need repairs. 

An inground pool is also a good selling point. If your new home has one, it can be costly to maintain. You’ll have to buy equipment and chemicals to keep the water clean and inviting. Also, you need to have a concrete pool acid washed every five years to maintain the interior finish.

Security

If you opt for a burglar alarm, it often comes with a monthly fee. The fees will vary depending on the features which can range from glass break detectors to panic buttons. If you don’t want to pay for a security system, you will need to buy new locks for your home when you move in and possibly install more outdoor lighting.

Emergency Appliance Replacement

Refrigerators, washers and other appliances don’t last forever. Every family has certain appliances, like an oven, that they cannot live without for too long. Put aside some extra money to replace these appliances when needed so you don’t have to use a high interest credit card for emergency purchases.

Written by Taylor McKnight, Author for Evolve Bank & Trust