Hidden Costs of Owning a Home

When budgeting for homeownership, many first-time buyers focus on the mortgage payment but overlook other significant costs. Here are the hidden expenses to consider:

Property Taxes

Property taxes vary by location but typically range from 0.5% to 2% of your home's value annually. These can increase over time as property values rise.

Homeowners Insurance

Insurance costs depend on location, home value, and coverage level. Expect to pay $1,000-$3,000 annually, with higher costs in areas prone to natural disasters.

Maintenance and Repairs

Budget 1-3% of your home's value annually for maintenance. This includes routine upkeep like HVAC servicing, gutter cleaning, and unexpected repairs.

HOA Fees

If you buy in a community with a homeowners association, monthly fees can range from $100 to $500+ and typically increase over time.

Utilities

Home utilities are often higher than apartment utilities due to larger spaces and older, less efficient systems.

Closing Costs

These one-time fees typically total 2-5% of the home's purchase price and include loan origination, title insurance, and escrow fees.