The Cost of Buying a Home Beyond the Monthly Mortgage Payment
Buying a home is a huge accomplishment and is typically the largest purchase we will make during our lives. It is important to understand the benefits of buying a home versus renting and to also know what a smart investment this is for your financial future.
Beyond being a good investment, it is also a savvy move to educate yourself about the costs involved with not only buying, but owning a home. In addition to the down payment and mortgage, these are some additional costs and expenses to be prepared for when you buy a home of your own.
The True Cost of Homeownership
- Mortgage Payments – Your monthly home mortgage payment can be set up to include some of the additional costs involved with homeownership. In addition to paying the principal and interest on the mortgage, the monthly payment can also include property taxes and homeowners/private mortgage insurance.
- Property Taxes -Georgia homeowners will pay property taxes that are calculated annually. These real estate property taxes are assessed by the local government and are used for public services like police, fire departments, and schools.
- Insurance -Homeowners must obtain required insurance policies on the home. These include:
- Flood -Flood insurance protects against damage to the home that is directly caused by flooding.
- Homeowners – This insurance policy protects your home and contents from disasters such as fire, theft, and tornadoes.
- Private Mortgage Insurance -PMI is a mandatory insurance policy for those who buy a home with a downpayment of less than 20%. This policy protects the lender in case the borrower defaults on the loan.
- Utilities and Services – Utilities and services for a home includes electricity, natural gas, internet, cable/television services, trash pick-up, and water. Depending on your location, you may also require services such as snow removal and landscaping.
- HOA Fees – In some communities, an HOA fee is an expense that comes along with homeownership. Dues are paid monthly or quarterly and are a recurring expense that will last as long as you own the home. The cost varies by location and amenities and can range from a few hundred dollars to thousands depending on your community.
- Maintenance and Repairs -Homeowners should set aside around 10% of the total mortgage payment each month for home maintenance and repairs. If your mortgage is $1500/month, that equals $150 per month or $1800 per year for home repairs and maintenance. Emergency repairs could put you in a financial crisis if you are not prepared.
- Home Improvement -Even brand new homes often require upgrades or renovations. As a homeowner, you should pay attention to such things like floors, appliances, HVAC system, and the roof to ensure they are updated as needed so the value of your home continues to increase.
Southern Select Properties Can Help You Find the Right Home for Your Budget
Our team of professional Realtors at Southern Select Properties is here to help you find a North Georgia home to buy that is within your budget. We can assist you in finding a lender that can guide you through the home loan process and discuss your options for financing. Stop wasting money on rent! Contact the team at Southern Select Properties today to get pre-approved with a local lender and start home shopping!
