Buying a home is an expensive proposition, therefore, it’s crucial that you prepare yourself ahead of time for the amount of money that’s required as you make your way through the process.

Making a list of what your monthly expenses will be is a good first step toward fully understanding your true financial commitment before signing the dotted line.

Here are some of the expenses you can expect.

1. Property Taxes. Taxes can add hundreds of dollars to your monthly mortgage payment and can increase depending on school and town budgets. Remember that a home is normally taxed on its assessed value, an amount equal to a fraction of its appraised value.

2. Homeowner’s Insurance. A necessity with any home purchase, you’ll want to insure the value of your new home against fire, theft and perhaps even flood damage. While flood insurance must be purchased separately, it’s important to shop around for the best price, no matter what type of insurance you’re seeking. Keep in mind that the cost of insurance can go up each year.

3. Private Mortgage Insurance. If you put less than 20 percent down for your mortgage, you’ll have to pay PMI, which protects the lender against your defaulting on the loan. Again, you could be looking at hundreds of dollars each month.

4. Exterior maintenance. You may love a property because of its large yard and beautiful landscaping, but unless you have a green thumb—and the time to commit to keeping the yard in top shape—you’re going to need someone to come in and mow, weed and take care of those flowers and shrubs. The last thing you want is for that picturesque outside to begin looking like a jungle.

5. Utilities. For those used to living in an apartment—or even at home with mom and dad—things like water, gas, electricity and oil may not have been a concern. But when you move into a new house, you need to pay for all of these things, plus cable, phone and Internet service. It’s always a good idea to ask the seller for their average monthly cost over the last year so you know how much you should be putting aside for utilities.

Also, don’t forget that you’re most likely going to want to make some changes or upgrades within the home, so make a list of all the projects you’re considering—such as adding new carpeting, drapes or appliances—and leave room in your budget for some of these costs each month.

For more information about the costs associated with purchasing a home, contact our office today.

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