Shelling out the dough for your house’s down payment was probably the biggest hit your bank account has ever taken, and the account depletion can leave you a little shaken — not to mention ready to start saving again. But your down payment was far from the last expense you’ll pay as a homeowner. Although the next couple of payments may not be as massive as the down payment, homeownership comes at a price — both on closing day and every month after that.
To keep you sane as you embrace your new life as a homeowner (and safe from buyer’s remorse), here are 10 potential expenses new homeowners should put on their radar.
1. Monthly mortgage
Of course, it’s pretty clear from the start that this is the big payment you will need to make on a monthly basis. You can certainly count on paying off your mortgage every month for the next 15 to 30 years, depending on the terms.
These are usually paid twice a year, but property tax laws vary state by state (and even by county). The great unknown here is that in some states, property taxes fluctuate year to year. Sometimes they can be reassessed at a lower rate, but realistically, if your tax payments change, you’ll likely be paying more, not less.
This also varies by state and region and is influenced by other variables such as whether you have a home security feature or a certain number of smoke detectors. Depending on where you live and what kind of coverage you buy, insurance can run you anywhere between $500 and $1,500 or more a year. It helps to bundle your homeowners’ insurance with other types of insurance, such as auto and life. Insurers even offer you discounts for doing so!
4. Hazard insurance
This includes coverage for many types of natural disasters — earthquakes, floods, tornadoes, or hurricanes, depending on location. For example, if you’re looking for homes for sale in San Francisco, earthquake insurance may be more relevant to research than hurricane insurance.
Pro tip: Don’t wait until bad weather is looming to look into this: It’s important to be prepared early. Flood insurance, for instance, has a 30-day waiting period from the date of purchase before your policy goes into effect.
5. Condo, co-op, or homeowners’ association fees — and assessments
If you own a condo, co-op, or townhouse, you’ll pay an annual or monthly fee to maintain the building and grounds. Single-family homes can also have assessments if they are located in a particular area or subdivision with common property. This is routine in gated communities with security guards, a swimming pool, tennis courts, clubhouse, playground, or any common amenity that will need eventual repairs and replacements.
If you’re renting, you’re probably used to paying monthly utilities. But as a homeowner, chances are, you may be paying a bit more now that you have a home (and maybe more square footage). Think about gas, electric, water, and a couple you probably didn’t deal with as a renter: sewer and trash removal.
Pro tip: Make sure you’re not throwing money away by leaving lights on or overheating or cooling your home. Research how to make your home the most energy-efficient to save money on utilities.
7. Big-ticket renovations and repairs
At some point in your life, you’ve probably been advised to put away money for a rainy day. That’s because a new roof can be very expensive! Upgrading the electrical or plumbing, or something icky such as sewage line issues, are all major costs. Then there are also the renovations you may someday want to make to turn your place into a dream home. Updating the kitchen or the master bath can completely drain your savings. Plan accordingly.
Things break; appliances wear out, faucets drip, screen doors get walked through. It happens. You’ll want to keep some emergency money handy for a clogged kitchen sink or rusted water heater. You’ll probably average a couple of hundred bucks a month in these “unexpected” costs, so build them into your budget now!
9. Pool and yard care
Depending on how much outdoor space you have to maintain, you’ll need to have money to cover routine expenses. Even if you decide to take the DIY route on some tasks, you’ll still need to hire professionals for occasional work, such as heavy-duty tree trimming or fixing a problem with your pool’s heating system when it breaks down.
10. Moving expenses and new furnishings
These may not be an ongoing expense, but are still a major one after you close on the house. You’re going to need a place to sit and sleep in that shiny new house of yours. Been furniture-shopping lately? It can get expensive, so leave room in your house-buying budget to turn the inside of the home into your own personal paradise!