There are many costs to consider while you are looking for a home, but the costs that come after purchasing your home are easily overlooked. Once you have purchased your home and gotten your keys, the excitement is all you can think about! But remember that there are costs after the big purchase too. So what are they?
Homeowners insurance is an important purchase because it provides a safety net. If your home or its contents are damaged or destroyed, financial compensation can be provided as well as financial support for legal costs in the event that someone is injured in your home. Here are a few things that you should know about insurance costs:
- Ideally, you want to have insurance that will cover 100% of the rebuilding costs, should they be necessary. Consider all of your financial assets that need to be protected – your home, investments, retirement accounts, and anything else of value.
- You may sometimes need to add extra insurance onto your policy if you are in zones that include unfortunate events (earthquakes, tornadoes, hurricanes, floods, etc.).
-You can typically expect to pay around $35 per month for every $100,000 of your home’s value. Some companies may provide multi-policy discounts if you hold multiple policies with them
-Make sure you check every year that your home insurance provides adequate coverage
The maintenance of your home can often require special budgeting and an emergency cash stash just in case. Maintenance takes into account everything from fixing chips in the paint, to lawn care, to pest control, to replacing major appliances in your home. How do you budget for that?
-A good rule of thumb is to expect to pay around 1% of the purchase price of your home on repairs yearly ($2,000 for a $200,000 home)
o You may not always use what is budgeted and you may sometimes use more than what is budgeted.
o This also takes into consideration repairs and inspections that need to be completed throughout the year.
-There are other factors to take into consideration:
o The age of your property and the items that may need to be replaced.
o The weather conditions where you live. Harsher conditions lead to more wear-and-tear, which can translate into higher maintenance costs.
o The condition of your home and appliances affect maintenance costs as well.
o The location of your home may also make a difference. For example, if your home is located at the bottom of a hill where water can collect, your home may require more maintenance.
-Take into consideration and budget for renovations you want to complete in the future.
o Don’t forget about labor and installation costs when you are budgeting.
-Have an emergency fund just in case things go wrong. Your water heater could bust, your dishwasher could overflow, or any other number of things and you want to make sure you can comfortably pair repair costs.
You want to make the house your own. It is your home and as long as you stay within regulation, you can do what you want. Whether it is buying new furniture, replacing your countertops, changing paint colors or floors, these costs need to be taken into consideration. If you are not careful, these personal touches can quickly get out of hand, so budget, budget, BUDGET!
Paying taxes on your home can be a confusing process and can give you a big headache. To avoid the drama, it is always best to seek help, especially if you are unsure.
-Tax prices that you will pay annually are based upon the sales price of your home.
-Typically, your taxable value will be about half the value of your home.
-Be knowledgeable about the taxes you will have to pay before you purchase your home so you are not budget
- Review these 9 mistakes homeowners make on their taxes to help you avoid them yourself.
- Good news: TAX RETURNS! You get to deduct many home-related expenses that will reduce your tax bill and may
even get you a large tax refund.
While the costs of a home may seem overwhelming both before and after you purchase a home, there are always many tools and resources to help you along the way!
If home buying is something you are considering or thinking about, get more information about the market from one of our experienced agents!