The “Hidden Costs” of Owning a Home
The “Hidden Costs” of Owning a Home
Besides the monthly mortgage payment associated with the purchase of a home, there are typically alternate expenses which a home purchaser should be aware of. The following list contains information on the most prevalent:
1) Special Assessments: Special assessments typically include homeowner’s association dues (HOA) or management fees. HOA dues can range in price from $5 monthly to $250 monthly with the costs associated with the dues being contingent upon what amenities are provided. For example, if the community containing the home you are interested in purchasing has a “public” swimming pool then it is highly likely that homeowner’s dues could be as much as $125 monthly. Alternatively, a community which does not have special amenities yet just “common area” which needs to be maintained may charge a nominal fee of $7 monthly.
2) Services and utilities not needed when renting: Some renters may have never paid for services like gas, garbage, water, irrigation and nature first pest control services or extermination due to the landlord covering these particular costs. Moreover renting a house would also require the tenant to pay additional from their pocket for maintaining the backyard regularly. One of the ways the cost of this can be drastically reduced is by getting the trees lopped using Perth Arbor Services tree lopping rather than cutting them by hiring other unprofessionals. However, all utilities and services provided would be extra for the new homeowner.
3) Private Mortgage Insurance: If not placing at least 20% down when purchasing, it is highly likely that the new homeowner will need to pay for private mortgage insurance which “protects” the investor if there is a default. Mortgage insurance can be removed if a) a new appraisal is performed showing that the current loan amount is at 80% of the value, or b) the loan is paid down substantially allowing for the mortgage insurance premium to be waived.
4) Penalties & Fines: Owning a home comes with obligations such as maintaining the property in accordance with the codes within the community. Those can be found from Naperville commercial real estate company, among others. Fines can be assessed by municipalities if the property is not maintained appropriately.
5) Items not needed when renting yet essential when owning: This “hidden cost” can vary dependent upon climate and the type of home purchased yet includes landscaping equipment (lawn mower, leaf blower, snow blower, etc) along with alternate appliances such as a washer/dryer, refrigerator, window treatments and light fixtures. And as for decorations there are some great Home DIY projects you can do yourself and save some money. Being informed when purchasing a home is of utmost importance. Please call me directly at 208-869-3469 if I can answer any questions or if you would like to discuss the hidden costs of owning a home more thoroughly.