If you are a new home owner, congratulations, this is probably a very exciting time for you. Take a second and enjoy your accomplishment but don’t rest too long. You have to get ready. For what? For the onslaught of surprise expenses that you are about to get hit with. Don’t worry, you can handle it, but it is best to be prepared. Here are some upcoming expenses that you need to get ready for.
Your home inspection will help you find the obvious faults in a home, but an inspection does not catch everything. You might, for example, move into your home and find that while the dishwasher works, it doesn’t clean very well. Depending on the appliance, you could be out anywhere from 400 dollars to 1000 dollars. If you do not have a new home or aftermarket warranty, this cost is on you.
If you do not have a green thumb, you will need someone to take care of your lawn. Just a basic cut and trim can cost you 200 dollars a month in many areas. If you need extra services like tree trimming and flower bed maintenance, it could be even more money.
If you have been renting a small and efficient apartment, stepping into a larger home or house can be a big shocker. All that space comes at a cost, higher utilities. The bigger and the older your home, the worse it will be. Expect for your electric and natural gas payments to go up dramatically to heat and cool your new home.
In addition to electric and gas, you also have to consider trash service and water. Depending on your old rental, you may have never had to pay these at all. That could be an extra 100 to 200 dollars a month that you never had to pay in the past.
If you have rented in the past, you have never had to worry about routine maintenance but you have a lot of it now.
Paint will have to be touched up from time to time. The easiest way to go about this is to keep some touch up paint handy and go through your home twice a year tackling the rough spots before the work builds up. Even with regular touch ups, you will still need full repaints every 5 years or so.
In addition, your homes HVAC system will need to be inspected on an annual basis. This will keep it working as well as possible and could prevent more costly repairs down the road.
Besides the above, there will be a lot of other little things that can add up in a hurry. You have pest control, carpet cleaning, roof repair, pipe cleaning, dryer vent cleaning, etc, etc. So, in other words, get prepared.
Regular maintenance will help prevent costly repairs but it can only do so much. The unexpected will happen. Out of nowhere a pipe could burst or a hot water heater could go out. When this happens, you will need to come out of pocket to cover the repair. The best solution for this is to have a well stocked emergency fund that you can draw from.
It seems that most new homes these days go up in an HOA neighborhood. HOA’s or Home Owners Associations, enforce all of the community rules and pay for the maintenance of common grounds. They use money received from dues to handle all of this. Most dues will be paid quarterly or twice a year but some communities even have monthly dues. Plan ahead for the bill, it is usually not included in your mortgage escrow payment.
This is a big one that most people do not consider. Your escrow account is used to pay for your home owners insurance, mortgage insurance and taxes. It is part of your mortgage payment and when the amount is calculated, they consider the current home insurance rate and the last years taxes.
The problem comes with the tax calculations. The county will generally seize the opportunity to raise taxes on your home, especially if the house was very under valued on the tax roles. This means that taxes will be higher than calculated and you will be left with an escrow shortage.
Don’t worry, the bank will take care of it and they will even charge you any interest on the money they have to pay for you. They will increase your escrow payment however and this could easily be a 200 to 300 dollar increase.
Escrow shortages can be a big problem so it is best to be prepared with money in the bank or by paying a little extra each month into your escrow account.
Besides the above, there are a lot of other little expense that will sneak up on you. me will be needs and some will be wants. You will want to buy furniture to this home and add your own special touches. Paint, rugs, custom flooring and art work are expensive.
You will also need services like internet, cable or satellite and perhaps even maid service. You will soon see that these add a lot of money to your monthly bills.
Tina’s Final Word
Home ownership can be an expensive thing but it is well worth it. he financial rewards along with the stability will add a lot of quality to your life. This article is not meant to make you think you have made a mistake, its purpose is to get you prepared and encourage you to save money for the unexpected.