When most buyers enter the market place their most important figure on their minds in the sales price. Rightfully so, this number determines everything from insurance costs to your mortgage payment. Buyers will often spend a long time shopping around for the home that’s best for them at the perfect price. Many people forget to consider a few other numbers that can be just as important, however. These figures aren’t included in the price of the home, but understanding some of these less obvious costs of homeownership, you can better budget and plan to find the house that you can both love and afford.
Homeowners Insurance – When you buy a home your lender will require you to purchase a homeowner’s insurance plan. Just like car insurance, homeowner’s insurance can vary greatly in price depending on the exact coverage you want or need and the company that you decide to take out a policy with. This is an area where it pays to do your research. When shopping around for policies make sure you get the right coverage for your home and pay special attention to your deductible.
Maintenance – If you’re used to renting a property you’re used to being able to call the landlord when something in your home breaks down. But when you own a home things are a little different – you’re responsible for repairs! Does your new property have an old water heater? Or furnace? How old is the roof on the property? These are all very important things to consider.
Taxes – The average property tax rate in 2014 for Massachusetts was 14.79%, but that rate can vary depending on the towb where the house is located. Do your research on where you are going to live so that you have a better understanding of what you should expect to pay. Don’t forget that your taxes are based on assessed value and not sales price!
Recycling / Trash Pickup – Unless you are lucky enough where your town handles your waste removal, you’re going to have to invest in a recycling or trash pick up service or otherwise purchase a waste station permit. The good news is there is a lot of competition in this market, so you’ll likely be able to secure a good price.
Homeowner Associations – Homeowner associations (HOAs) can be great for supplying amenities you might not otherwise be able to receive if you were just a single homeowner. But keep in mind HOAs charge monthly, quarterly or annual dues.
By understanding the price of homeownership beyond the list price of the home you will be better able to run your finances and find the home that fits your needs and your budget. Don’t let any of these “hidden” costs discourage you from fulfilling your dreams of buying a home!