The cost of buying a home can be deceiving. You have to have a future mindset as much as possible when buying a home. If you’re stretching your budget just to afford a monthly home loan payment – you probably need to save more before buying. You need to consider more than just the monthly payment when buying a home. If you do not budget for home expenses in addition to the monthly payment, you could possibly end up falling behind on payments or not being able to afford the typical expenses associated with homeownership.
So, as is true with most things – planning, budgeting and education is the best way to prevent future issues! Let’s look at some of the hidden costs of homeownership.
Moving and transport. Buying a mobile home is a great choice. Too often people who are moving their home to a piece of land don’t fully consider the expense of moving and installing the home. This is an expensive process and if the home is not moved and installed properly it can lead to damages and additional expense. Be sure to evaluate all your options such as financing your home delivery and installation costs into your loan amount if permitted by the lender you choose, finding a skilled company to handle your move, and hiring a contractor who can prep your land for a home, water, and electrical.
Utilities. You may be familiar with paying monthly utilities as part of monthly rent. However, as a home owner, the utility accounts will now be in your name. That means you are responsible for paying the entire monthly bill. So before moving in it is always wise to ask the previous owner or a neighbor what they typically pay in the winter and summer for utilities. This will help you to budget for utilities as part of your monthly expenses.
Repairs. Every home requires maintenance and repairs over time even with a new home or a home that is in great shape. It’s good to save each month toward a home repair and maintenance fund knowing that repairs will eventually be needed. The cost of repairs from ordinary wear and tear will add to your expenses, but saving as you go should help keep you covered.
City/ County taxes. As a homeowner you are responsible for paying local property taxes. Property tax payments are something homebuyers often forget to consider because they are usually paid as part of a mortgage escrow payment – which most people never quite understand. Here’s our explanation of escrow to help you out.
Trash/recycling services. Whether you are living in the city or a suburb, you’ll probably have some sort of trash service which you will have to pay for as part of your local property taxes or as a separate bill. Even if you do not have a trash service because you live in a rural area far from a city, you’d probably rather pay someone and hire a service to come get your trash instead of having to make frequent trips to the dump yourself.
Potential lot rent. If you live in a mobile home park and own your home but not the land it is on, lot rent is an extra monthly payment that will need to be considered and budgeted for.