Consider These Costs When Purchasing a Home
Many people purchase a home without giving too much thought to what it will cost to own it. While many budget for expenses like the mortgage, closing costs, and attorney fees, beyond that many homeowners have no idea how much the upkeep of their property will be. To prevent purchasing a home that you essentially can’t afford, it’s ideal to have a full picture of what the cost of living in a home will be.
Did you know that on top of paying for a mortgage each month that you will also be responsible for paying quarterly taxes to the local government? Depending on the area you live in, property taxes can range from a few hundred dollars each year to a few thousand. Overlooking the need to pay property taxes could result in interest and monetary penalties from your city.
Assuming that the cost of your utilities will be the same from one location to the next is a mistake made too often. The amount you pay for utilities such as water, gas, and electric will greatly depend upon where you live, how large your home is, and how efficient the property is. Before purchasing a property, check online at sites such as this http://www.albertaenergyproviders.ca/direct-energy-alberta/Alberta/ to get a comparison on the cost of utilities in the area.
When you find a home that you’re interested in purchasing, the costs of having the home inspected will fall on you. Skipping a home inspection however, could leave you vulnerable to investing in a property that will drain your budget fast. Home inspections cost a few hundred dollars however are worth it before signing on the dotted line.
In order to purchase a property and obtain a mortgage, applicants must also have qualifying homeowner’s insurance. Such insurance is put into place as a means for providing monetary protection in the event that something unforeseen happens to the property or your personal belongings. Homeowners insurance, while not generally expensive, is an expenditure you need to account for.
Maintenance and Repairs
If you’re used to living in a rental property where the landlord took care of everything you may not consider maintenance and repairs. The truth is, no matter how new the property is when you purchase it, there is always the chance that something could go wrong. It is imperative that you have the funds set aside to make repairs on necessary appliances and systems such as the furnace, heating and cooling system, electrical, water, and plumbing systems.
Many people fall into debt as a result of not being well informed about the true costs of owning a home. Taking the “wait and see” approach could result in you falling behind on bills and ultimately it could result in you losing your home. Rather than invest in a property blindly, it is imperative to really evaluate what it will cost before making a final decision. After reviewing your finances verses your expenses, you can determine if purchasing a home is the right decision for you at the time.