Jay Allen's Blog
When you budget to buy a home, you sit down, do the math, and try to estimate what all of your monthly costs will be. There are so many monthly costs that come with being a homeowner that can make the whole process complicated. Sure, you have taken the standard costs into account like home insurance, property taxes, and even utilities. But there are a few out-of-the-box costs that you’ll need to consider for your house hunt.
Flood Or Other Natural Disaster Insurance
Natural disasters are costly and devastating. Many homeowners who live in areas that are affected by natural disasters like floods and earthquakes often opt for additional coverage for their homes. Premiums for earthquake and flood insurance often end up being very high. As a natural disaster strikes, these premiums can go up even more. If you live in one of the high-risk areas for natural disasters, you’ll want to check with your insurance agent ahead of time to plan for the additional costs that these special kinds of insurance will incur.
Tax Hikes And Special Assessments
As a homeowner, you’ll need to prepare for different kinds of assessments and tax increases. If your condominium complex needs significant repairs then you’ll probably end up paying an assessment to help offset the costs. This is what comes with belonging to a homeowner’s association.
Historically, as a town or city's expenses rise with the cost of living, so too must the property taxes. Infrastructure improvements & construction costs for new schools can cause your tax burden to spike significantly at times. Financially, this is a hidden cost of homeownership that you should be prepared for.
Unexpected Maintenance Costs And Home Furnishings
Once you move into a home, you’ll need to prepare for the unexpected. The dishwasher may need to be replaced. The roof may need repair. The walls may need some paint.
When you buy a home you will also need a number of household items. These could include dishes, pots and pans, sofas, beds, and more. You don’t want to leave your new home completely empty! You also don’t want to be without vital appliances like an oven or a sink for too long if they are outdated or in disrepair. This is why it’s a good idea to have extra money on hand to deal with any of these costs.
The best rule of thumb to follow when buying a home is to always be prepared with a bit of extra cash on hand to avoid major issues down the road.