Homeownership is more than having a mortgage for years and years. There are other costs that you will have for as long you own a house. We don't want this hiidden costs to catch you off guard, so here's a detailed explanation about each one of them.
Many Americans dream of becoming homeowners, and buying property is actually considered one of the most important milestones there are. And it is a pretty big deal, but you need to know that there are certain costs that are often overlooked. Let's dive into this very important topic:
1. Homeowners insurance
There is some confusion in this area, but here’s the main thing you need to understand: when you apply for a mortgage, your lender will probably require you to get insurance. But that insurance is for the mortgage, not for the house.
Getting home insurance is necessary and it can add to your expenses. Make sure you shop around to find the best option.
2. Catastrophic insurance
In some areas, regular home insurance won’t be enough. If you live in a state prone to natural disasters, you also need to get catastrophic insurance, as these incidents are usually not covered by regular policies.
3. Property taxes
If you thought that you needed to calculate your mortgage monthly payment to determine whether you could afford to buy a home or not, you are wrong. In addition to that, you also need to consider property taxes that, depending on your location, can be more or less expensive, but they definitely add thousands of dollars per year to the cost of being a homeowner.
4. HOA fees
Homeowner or Condo Association fees can be a surprise if you are not ready for them. Depending on where you live, they can be $25 or $200 a month, so it is important to know this number before actually buying the property. These fees usually cover building maintenance, but in some cases, it can also include trash pickup, snow removal and sewer maintenance.
5. Heating and cooling systems
These systems usually add to the overall cost of owning property, because they require checkups, inspections and maintenance, which are usually done at least once a year. This ongoing cost can add up to the total cost of homeownership expenses, but they are necessary if you want to save more money in the long run by keeping these systems healthy.