Planning for Homeownership Costs

by Cathy Tishhouse 12/22/2019

Image by Have a Nice Day Photo from Shutterstock


The home you've been searching for is on the market, and now you’re ready to buy it. But can you afford it? How do you know? The internet is filled with mortgage calculators to help you determine what your mortgage payment will be. You simply plug in the numbers — the selling price, interest rate, down payment amount — and voila! Out pops your payment amount for the next 30 years.

Closing Costs

Your mortgage payment, with principal and interest, might tell you what to expect to pay the bank but multiple other factors add to the cost of homeownership. First, you'll have closing costs. Your real estate professional can give you an approximation of what these may be but the exact numbers won't be available until the closing is official. Closing costs include things like points and prepaid interest based on the day the loan closes.

Taxes

While you may know your tax costs for the first few months of homeownership, changes in levies, tax rates, and property evaluations can raise rates unexpectedly. If your home is in a developing community, costs of roads, streetlights, and other infrastructure get passed to homeowners in the form of special assessments, taxes, and fees.

Homeowner Association Fees

When your community has shared property such as playgrounds, pools, parks, and clubhouses, expect to pay monthly homeowner association (HOA) dues. These may come as a separate bill or be paid from an escrow account that your bank sets up. Like taxes, homeowner association dues and fees may raise each year to compensate for inflation or maintenance needs. If your HOA takes care of fences, roofs, and building exteriors, be prepared for periodic assessments. This may happen more frequently if your home is in a storm-prone area since wind and hail can cause considerable damage.

Periodic Maintenance

Whether you have an HOA or not, your home requires regular maintenance. When this is your first time as a property owner, you might not realize all the things covered in your rent. You'll have annual inspections to your heating and air conditioning systems, checks on your in-ground sprinklers, and pest control. You’re also responsible for attending to leaky faucets and running toilets, replacing the HVAC filters, replacing batteries in smoke detectors, and repairing anything that breaks.

When you’re ready to start shopping, your professional real estate agent can help you understand the costs as well as the advantages that come with homeownership in your area.

About the Author
Author

Cathy Tishhouse

 Prior to becoming a Realtor in 2004, I was the training manager for Marriott Hotels at the Detroit Renaissance Center and a Corporate Trainer for Marriott International. . I have worked extensively in the hospitality industry as a Food & Beverage Server and Human Resource professional (staffing, recruiting and training hospitality) for Westin Hotels. .

With over twenty five years experience in customer service,  I believe that caring for clients is the most important aspect of my career—particularly in the purchase or sale of real estate— usually the single largest asset a person possesses.  The Real Estate Industry is a dynamic and  changing profession and you need the guidance of a proven professional to represent your interests.

I love what I do -- creating ways to develop my business and new marketing strategies for my listings, the variety in viewing so many homes and interiors and finally, I love it because I know I make a difference in my interactions with people and the service I provide.

When you make the important decision to buy or sell a home, I’m committed to going the extra mile to ensure that all of your needs are successfully met in a professional and honest manner.