Are you tired of renting and ready to take the plunge and become a homeowner? You might want to read through these scary, and very costly, extras that add up shockingly fast. Sometimes the purchase price looks well within your reach, but the mortgage payments, insurance, real estate taxes, and maintenance costs can easily move your dream house into the "off-limits" territory.
The Purchase Price Is Just the Beginning
Once you’ve fallen in love with a house and you’re getting ready to make a bid, consider the ramifications of the purchase amount. Not only will this affect your monthly mortgage payments, but your annual real estate tax bill will increase as well. Learn about mortgage rates from an expert—a qualified home lender, your banker, or a real estate agent. And don’t forget insurance! Refinery29 recommends getting preapproved for a loan before you even go to an open house. It’s one thing to know your ballpark figure for buying a home and another to fully understand the ongoing costs of maintaining that home.
Your Rainy-Day Fund Needs to Be Bigger Than You Think
When you rent, if your heater breaks, you call the super. When you own, if your heater breaks, you drain your bank account. Make sure you’re able to save 1% to 3% of the total home cost per year so you always have funds to pay for that running toilet or, heaven forbid, a leaky roof.
Cleaning vs. Maintenance: There Is a Major Difference
Hectic workweeks can often result in messy apartments. But when you own, you can’t just push tidying up off to Sunday. Maintenance is an ongoing operation, and you have to make sure you’re taking care of your home and all of its appliances on a regular basis.
Everything But the Kitchen Sink
Did you know that the average cost of a kitchen remodel ranges from $19,000 to $113,000? HGTV and other home decorating shows like to omit this enormous factor when they show off gorgeous and seemingly reasonable redesigns. If you love to entertain as much as we do, those extra costs can escalate quickly. Hello, Kate Spade New York tableware, designer dining chairs, and wine fridge.
With all of that said, if your financial ducks are in a row and you feel comfortable with all of these costly truths, then congratulations! Owning a home is a huge accomplishment, and it feels pretty awesome!
For more scary truths about home ownership, check out Refinery29.
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