Buying a home can be one of the best moves of a lifetime. It can even be cheaper than renting in some cases. Yet, there can be a lot more to owning a home than many first time buyers realize.
Mortgage payments are the most obvious and well-known costs associated with buying and owning a home. You’ll most likely be making monthly principal and interest payments. You can choose a long term fixed rate, or a lower teaser rate on an adjustable rate mortgage. Just be wary of future fluctuations in interest and payments.
Insurance can be one of the biggest expenses of owning a home. Some insurances may be mandatory. Others are voluntary, but are simply smart to have. This may include basic hazard insurance, flood insurance, windstorm, and flood insurance.
Home Owners Association Dues
So many homes, townhomes, and apartments in America are governed by associations today. It could be a HOA, condominium, or coop. Some even have master associations, or multiple levels of associations. That can add hundreds or thousands to your monthly housing cost. It is also important to watch out for special assessments which can be levied by the board.
Depending on your choice of home you could be paying electric, gas, water, sewer, and trash removal. Unfortunately, with such monopolies in these industries, homeowners don’t have any choice but to pay whatever they demand, unless you are generating your own power and water.
Maintenance & Replacements
Owning any property for long enough will mean the need for maintenance and repairs. It could be as simple as landscaping. Or as expensive as foundation repairs and replacing major appliances and roofs. Money should be set aside each month to cover these future costs.
Property taxes are especially high on Long Island. The new tax bill means that even less of this tax can be deducted, and prepaying property taxes may not help. Click here to find out how to lower your property taxes in Nassau and Suffolk County.
Buying a home can be a great investment, and may come with many other benefits. Before you do, just make sure you are aware of all the costs involved, get something you can comfortably afford, and learn how you can minimize the costs of homeownership.