Maintenance and the Cost of Home Ownership
If you've been thinking about purchasing a home and have done your homework, you know there are a lot of extra costs involved in addition to monthly mortgage payments.
As a new homeowner you will be responsible for paying monthly home insurance, as well as annual property taxes.
In addition to this there are numerous one time fees that are part of the closing costs and can add a significant amount to your down payment.
One area that many people seem to underestimate, however, is maintenance.
Unfortunately, homes do break down and require repairs from time to time.
You never know when a toilet will leak, a stove will grow old and die, or when a severe thunderstorm will bring hail damage to your roof.
Of course, there are also optional improvements such as painting, new carpeting or floors, and new furniture.
Fortunately, these kinds of improvements are not mandatory and can be put off until you can afford them.
We're more concerned here about the necessary but unforeseen problems that inevitably pop up over the years.
So exactly how much do you have to spend on your home's maintenance each year? Well, the numbers will obviously vary from house to house and from year-to-year.
Just to give you an idea, you might want to estimate that you will need to spend about 1% of your home's purchase price each year.
Obviously this would not be the exact amount you will spend every year, but it will give you a good idea of what you need to be prepared for.
Some years may go by without much maintenance, while other years may involve bigger problems like a damaged roof.
If you happen to live in a condominium, your obligations will be a little bit different.
You will be responsible for maintaining the interior of your condo, but the fees you pay your homeowner's association should take care of the exterior of your home and the rest of the complex.
When you decide to become a homeowner, you are achieving a great and wonderful goal, but there are also many obligations and pitfalls along the way.
Part of the financial (and perhaps emotional) burden of owning a home is the continual maintenance you will need to perform.
Our point is not to discourage you from purchasing a home, but you simply need to know what you're getting into.
You especially need to be prepared financially for the inevitable costs that come your way above and beyond your monthly mortgage payments.
One last word on home improvements.
We know that many families wish to improve their residences by purchasing additional furniture, adding new floors, or doing any number of projects around the house.
These are considered elective improvements, but they obviously can add to the beauty and financial value of the home.
Just be careful not to overdo it and not to go into debt when trying to accomplish your goals.
Be sure to establish a home expense budget to help you from going over board and spending way too much on optional improvements.
As a new homeowner you will be responsible for paying monthly home insurance, as well as annual property taxes.
In addition to this there are numerous one time fees that are part of the closing costs and can add a significant amount to your down payment.
One area that many people seem to underestimate, however, is maintenance.
Unfortunately, homes do break down and require repairs from time to time.
You never know when a toilet will leak, a stove will grow old and die, or when a severe thunderstorm will bring hail damage to your roof.
Of course, there are also optional improvements such as painting, new carpeting or floors, and new furniture.
Fortunately, these kinds of improvements are not mandatory and can be put off until you can afford them.
We're more concerned here about the necessary but unforeseen problems that inevitably pop up over the years.
So exactly how much do you have to spend on your home's maintenance each year? Well, the numbers will obviously vary from house to house and from year-to-year.
Just to give you an idea, you might want to estimate that you will need to spend about 1% of your home's purchase price each year.
Obviously this would not be the exact amount you will spend every year, but it will give you a good idea of what you need to be prepared for.
Some years may go by without much maintenance, while other years may involve bigger problems like a damaged roof.
If you happen to live in a condominium, your obligations will be a little bit different.
You will be responsible for maintaining the interior of your condo, but the fees you pay your homeowner's association should take care of the exterior of your home and the rest of the complex.
When you decide to become a homeowner, you are achieving a great and wonderful goal, but there are also many obligations and pitfalls along the way.
Part of the financial (and perhaps emotional) burden of owning a home is the continual maintenance you will need to perform.
Our point is not to discourage you from purchasing a home, but you simply need to know what you're getting into.
You especially need to be prepared financially for the inevitable costs that come your way above and beyond your monthly mortgage payments.
One last word on home improvements.
We know that many families wish to improve their residences by purchasing additional furniture, adding new floors, or doing any number of projects around the house.
These are considered elective improvements, but they obviously can add to the beauty and financial value of the home.
Just be careful not to overdo it and not to go into debt when trying to accomplish your goals.
Be sure to establish a home expense budget to help you from going over board and spending way too much on optional improvements.
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