When you’re planning to buy a home, it’s essential to consider more than just the monthly mortgage payment. Homeownership comes with a variety of additional expenses that can significantly impact your budget. At O1ne Mortgage, we want to help you navigate these costs and ensure you’re fully prepared for the financial responsibilities of owning a home. Call us at 213-732-3074 for personalized mortgage services.

1. Property Taxes

Property taxes are a significant expense for homeowners, covering the costs of public services and infrastructure like schools and street maintenance. The amount you pay depends on your property’s assessed value and the local tax rate. For example, if your home is valued at $400,000 and the tax rate is 1.5%, your annual property tax bill will be $6,000. Some mortgage lenders may collect a portion of this amount monthly to pay the bill on your behalf.

2. Homeowners Insurance

Homeowners insurance is another crucial expense, protecting your home and belongings from damage or loss. Rates have been rising, with the average premium reaching $1,700 in 2023. Comparing policies from multiple insurers can help you find the best value. Use online tools to get quotes and ensure you’re adequately covered.

3. Private Mortgage Insurance (PMI)

If you put down less than 20% when purchasing your home, you may need to pay for PMI, which protects the lender if you default on the loan. PMI costs range from 0.5% to over 2% of the loan amount annually and can be paid upfront or included in your monthly mortgage payment.

4. Utilities

Utilities such as electricity, gas, water, trash, and internet add to your monthly expenses. You can estimate these costs by asking the previous homeowner or utility companies. Consider energy-saving appliances and practices to reduce your utility bills.

5. Homeowner Association (HOA) Fees

If your home is part of a managed community, you may need to pay HOA fees. These fees cover maintenance of common areas and amenities, and can range into the hundreds of dollars monthly. While they add to your expenses, they may also replace some costs like utilities.

6. Routine Maintenance

Maintaining your home is an ongoing task. Routine maintenance includes cleaning, HVAC servicing, pest control, and minor repairs. On average, homeowners spend around $2,458 annually on maintenance. Skipping maintenance can lead to more costly repairs down the line.

7. Landscape and Pool Maintenance

Outdoor spaces require regular upkeep. Lawn mowing services can cost between $50 and $250 per mow, while tree trimming averages $1,800. Pool maintenance adds about $230 monthly. Budget for these expenses to keep your outdoor areas in good condition.

8. Emergency Repairs

Unexpected repairs can be costly. A typical roof replacement costs around $9,267, and a water heater replacement averages $1,303. It’s essential to have an emergency fund to cover these unpredictable expenses. Some repairs may be covered by insurance, but deductibles and non-covered costs can add up.

9. Appliances

Household appliances have a limited lifespan, ranging from five to 17 years. Replacing appliances can be expensive, with costs averaging $2,175 per appliance. Plan for these replacements by assessing the condition of your current appliances and setting aside funds for future purchases.

How to Save for Homeowner Expenses

To manage the various costs of homeownership, it’s crucial to budget effectively. Here are some strategies to help you save:

• Emergency Fund: Keep three to six months’ worth of expenses in a high-yield savings account to cover unplanned repairs.
• Sinking Funds: Create savings accounts for specific expenses like property taxes, maintenance, and renovations. Budget 1% to 4% of your home’s value for an all-purpose maintenance fund.

The Bottom Line

Understanding the true cost of homeownership is the first step in managing your finances effectively. By accounting for taxes, insurance, maintenance, and repairs, you can create a realistic budget and savings plan. At O1ne Mortgage, we’re here to help you navigate these expenses and find the best mortgage solutions. Contact us at 213-732-3074 for expert advice and personalized service.