If you’re like more than two-thirds of U.S. homebuyers, you’ll be securing a mortgage to purchase your new home. And you probably already know what a mortgage payment entails: principal, interest, and possibly homeowners insurance, property taxes, and even private mortgage insurance.
Those are costs you expect and budget for when deciding how large a house payment you can afford. Your mortgage lender will also take into account those factors when deciding what size loan you qualify for.
But homeownership comes with other, perhaps lesser-known costs. When you’re buying a home, it can be important to consider these costs heading in so that you don’t have big surprises down the road. Here are five hidden costs nobody tells you about
Furnishing and decorating
Rarely do people move and bring every single piece of their current furniture and home décor with them. Especially if you’re moving somewhere with more space to fill, it’s likely you’re going to spend money on new furnishings and home décor.
Savvy homebuyers will recognize this early on and include those expenses in their homebuying plans. Another savvy step might also be to measure the dimensions of large pieces of furniture you do intend to keep. If there are things you want to bring that simply won’t fit, you’ll probably purchase replacements.
Also, keep in mind that you’re likely to replace blinds and/or curtains and maybe paint some rooms. Most people at least tweak the décor even in “move-in ready” homes.
Lawncare and landscaping
If you’re moving from a place where you never had to cut grass or take care of a yard, you’re in for an eye-opener. There’s a lot to do when it comes to caring for outdoor spaces.
If you have grass, you’ll need to purchase a lawnmower at a minimum. You might want to budget for fertilizer and watering. You could hire someone to do all that for you, but that’s even more expensive.
Insurance and tax increases
Especially if they’re built into your house payment, you’re aware of tax and insurance expenses and have accurately accounted for them. But they’re not necessarily fixed costs and are almost certain to change throughout the years.
Insurance rates are more likely to increase rather than decrease over time, and if you ever file a claim, they could jump significantly in just one renewal period. Similarly, property taxes typically change over time, too. The increasing value of your property can bump taxes higher, as can any new levies that pass. If you have homeowners association fees, those can creep higher over the years, too.
Aside from taking care of the yard, there are other ongoing maintenance costs that you can definitely count on.
Unless you want it to look drab and dreary, your home’s exterior will likely need to be pressure-washed every few years. There will be window-washing, gutter-clearing, maybe carpet-cleaning, and heating and air-conditioning checkups that are best left to professionals. Things will need to be re-finished and re-sealed. It all costs money.
As a homeowner, you can almost certainly expect the unexpected (and account for the costs). No matter how well you keep up with regular maintenance, there will be things that break or wear out.
A tree could fall. Shingles could blow off the roof. Garbage disposals, sump pumps, appliances, and garage door openers need to be replaced every now and then and almost never give much warning. It’s never a bad idea to keep a “rainy day” fund for home repairs that will be unexpected and necessary.
The bottom line
Buying a home comes with all the expenses you know about and then some. Planning and budgeting for every inevitable expense – even if it’s not obvious right now – can help you avoid unpleasant surprises down the road.