18 Apr A New Homeowners Budget
What expenses should you be prepared for when buying a home?
Buying a home for the first time can be a scary process. It is hard to fully know what to expect going into the process for the first time. In this post we try to cover all the home ownership costs you might expect when buying a home. That way you can have a better idea of what you budget really looks like and be able to plan accordingly. We won’t be dealing with exact numbers because those can fluctuate, but this will give you an idea of what you are looking at.
Insurance is a very wise thing to get when you have a large asset. which mean a home you hope to spend you life in deserves property insurance. Plus most banks will require it from those who take out a home loan. After doing some research we have found that on average, most property insurance is half of one percent of the home value.
Property taxes is probably the category that has the most variation. This can change from city-to-city. They are determined by your state or local government. Property taxes come from your homes assessment ration and/or the assessed value of the home. we have found that property taxes can range from one percent of this value, to five percent. It is good to do research in the area you are looking to make sure you budget the right amount.
If you are taking out a mortgage loan for your home, you may have to pay for mortgage insurance. This is insurance that is for your lender in case you default on your loan. To see what kind of mortgage insurances there are, or if it applies to you, you can read further in our mortgage insurance post.
Every new home will come with repairs or adjustments needed for your family. These can be simple things like replacing door locks, touch-up painting, or leaky toilets. They can also be bigger items like a new-roof, furnace, or replacing the driveway. It is always a good idea to have the home inspected before you have your heart set on it. This way you can look for those big money items that could break your budget. According to the U.S. News and World Report, you can expect to pay one to four percent of the homes value in maintenance expenses.
Buying a new home is a big stepping point in anyone’s life, whether it is your first home, or your fifth. It is good to have an idea of all the costs you’ll have so that you can budget accordingly. Here at Staples, we have a team ready to help you with all your mortgage and home buying questions. Feel free to stop in and ask in person, or request a quote online to help you further budget. We look forward to working with you!