The Hidden Costs of Homeownership: How to Budget for the Unexpected

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What if buying a home was even more expensive than you imagined? 

With housing prices creeping up every month, it’s difficult for would-be buyers to imagine simply saving up enough money for a house and good homeowners insurance. However, what such buyers need to know is that the cost of homeownership is often much more than they have imagined. 

The reason for this is there are any number of home expenses that extend far beyond the mortgage itself. Want to avoid those unpleasant surprises? Keep reading to discover how you can budget for the unexpected! 

First-Time Home Buyer: Anticipating Unforeseen Expenses 

In many cases, you can avoid unforeseen home expenses by doing a little research ahead of time. For example, if you are thinking about buying a condo, you need to verify whether you’ll need to pay any regular fees to a condominium organization. If you are considering buying a home, you’ll need to research whether the neighborhood has an HOA fee (if so, keep in mind that these may increase over time). 

In some cases, the mortgage itself may come with some unexpected fees. The best example is buyers who put down less than 20% on a house will likely need to pay private mortgage insurance (or PMI) until they have at least 20% equity in the property.  

Keep in mind FHA loans include a PMI that will never go away (regardless of equity) until you refinance. 

Cost of Homeownership: Hidden Costs Beyond the Mortgage 

Sometimes, the “hidden” costs of home budgeting are hiding in plain sight. A great example of this is homeowners insurance: It’s something everybody needs to protect their house, but many first-time buyers don’t realize how much the premium is going to eat into their monthly budget. 

To get a better idea about the cost of insurance, consider shopping around and getting the best possible rate that you can find. After you have estimates on the exact kind of coverage you need, you can have your lender estimate how much your monthly payment will be if it’s rolled into your monthly mortgage payment. 

Choosing an independent insurance agent will open the doors to many more options and choices, since they are not committed to selling only one brand of insurance and can shop around for you. 

Home Budgeting: Planning for Unexpected Expenses 

The best thing you can do to prepare for unexpected expenses is to transform them into expected expenses. For example, a few conversations with an inspector and a few hours of research can help you estimate when you’re going to have to replace some expensive (but very critical) components within your home. 

For example, it’s wise to replace the roof of a house every 15 years. If the house you are buying had the roof replaced a decade ago, you need to know the clock is ticking on paying for a new roof in the next five years. Meanwhile, air conditioners typically last 15–20 years, so verifying when a home’s AC was last replaced will give you an idea of how long you have before you must pay a handsome price to replace your HVAC system. 

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Repairs and Maintenance: Budgeting for Ongoing Home Expenses 

Speaking of things like air conditioners, your HVAC system is just one of the things you’ll need to budget for as an ongoing expense. Unless you’re a handy mechanic yourself, you may want to hire a local HVAC specialist to conduct annual inspections of your system. This is a cost that can easily pay for itself. By optimizing the heating and cooling of your home, these specialists can reduce your bills in the winter and the summer, and they may be able to detect and address small issues before they become major malfunctions that are very expensive to repair. 

Depending on where you live, you may also want to pay for pest control specialists to help with specific pests. For example, few creatures can threaten your home quite like termites. Because of this, you may need to get a termite bond for your home. Such an expense may also pay for itself by keeping your home safe from the creepy critters all year long! 

Importance of Home Insurance: Protecting Yourself From Unexpected Expenses 

Basic homeowners insurance will do a lot to protect your home from potential threats, including protection from theft and protection from fire damage. Depending on your area and your specific needs, however, you may want to find a carrier and a policy that can help protect you from some of the more unexpected expenses. 

As an example, if you live in a flood plain, you’ll want to purchase an additional rider to offer your house protection from an overflowing water source; otherwise, you may be a single rainy season away from seeing your investment washed down the drain. It’s also worth looking into a policy that offers protection against lost wages in the event of an accident. That way, you won’t have to worry that taking care of your damaged home will keep you from financially taking care of your family! 

Save on Homeownership with the Best Home Insurance 

Now you know what the hidden costs of homeownership are and how you can budget for the unexpected. But do you know who can help stretch your budget by providing top-rated insurance coverage at unbelievably affordable prices? 

At InsureOne, we do the shopping for you so you’ll have several options to choose from to make sure you are getting the best. We offer coverage from top-rated national carriers and our goal is to put you first. 

We know your home is your most valuable investment, and we’re here to give it the protection it deserves. When you’re ready for a carrier who can help you expect the unexpected, we’re ready for you to get a quote online. Alternatively, you can pick up the phone and give us a quick call at 800-836-2240. Finally, feel free to come into one of our nearby offices at your earliest convenience!