Before you embark on the bills to pay when owning a house, it’s essential to delve into the less glamorous aspect: the financial responsibilities.
So even as you get caught up in picking out paint colors and imagining your dream home, I just want to remind you that homeownership comes with some unavoidable expenses.
From bills like mortgage payments to unexpected repairs, there are a wide range of expenses that come alongside owning or buying a house, and while some of these are common knowledge and even expected, there are some that are sure to take you by surprise.
But you don’t have to be afraid, I’m here to help you out. In this post, I’ll break down the key expenses you need to be prepared for in the simplest possible terms, to ensure you’re well-prepared to handle the ins and outs of homeownership with utmost confidence.
Lets dive into the essential bills to pay when owning a houseand the financial responsibilities of homeownership
1. Mortgage Payment
Planning towards your monthly payment to the bank or lender for the loan used to purchase your home will remove a big chunk of the financial strain that comes with new home ownership.
This payment typically includes several components such as principal, which is the amount borrowed, interest, which is the cost of borrowing the money, taxes, which are often collected as part of your mortgage payment and put into an escrow account to cover property taxes, and insurance, which may include homeowners insurance to protect your property and mortgage insurance if you made a down payment of less than 20%.
It’s essential to budget for this expense as it represents a significant portion of homeownership costs and as such should always be accounted for.
In fact I would recommend you have your mortgage for the first three months of moving in, planned out and ready to avoid any surprises.
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2. Property Taxes
Property taxes are another set of bills you should have sufficient foreknowledge of, they are usually imposed by the local government presiding over new houses based on the assessed value of the property.
These funds support various public services and infrastructure such as schools, roads, police, and fire departments.
Property taxes are typically calculated as a percentage of the assessed value of your property and can vary depending on your location and the value of your home.
It’s important to find out and factor property taxes into your budget as they can have a significant impact on your overall housing expenses.
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3. Legal Fees
There is a need for a solicitor or licensed conveyancer to carry out all the legal work involved in the buying or selling of a house.
Your lawyer can also conduct local searches to check whether there are any local plans or problems and notify you.
They are also involved in giving you legal counsel and ensuring you make worthwhile investments.
While some people are lucky enough to have lawyer friends who are willing to help out with the legal aspects of homeownership, most other people have to pay for these services.
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4. Homeowners Insurance
You’d also want to have insurance coverage- especially to protect your home and personal belongings from potential damage or loss due to covered events like fire, theft, vandalism, or natural disasters such as hurricanes or earthquakes.
Homeowners insurance typically provides coverage for the structure of your home, personal property, liability protection, and additional living expenses if your home becomes uninhabitable due to a covered event.
Whether or not you are moving into a community with a previous history of such events, it’s essential to have adequate homeowners insurance to protect your investment, avoid loss, and provide financial security for you and your family.
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5. Homeowners Association (HOA) fees
HOA fees are yet another expense you should prepare for, as they are required in some areas as a contribution for shared community expenses such as landscaping, maintenance of common areas, amenities like pools or gyms, and sometimes utilities like water or sewer services.
HOA fees are typically charged monthly, quarterly, or annually and vary depending on the amenities and services provided by the association.
It’s important to understand the HOA fees and rules before purchasing a home in a community governed by an HOA as they can impact your budget and lifestyle.
Also, it’s worthy of note that if you are moving to a more upscale neighborhood then it stands to reason that your HOA fees would increase compared to what you were previously paying in your former neighborhood.
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6. Utilities
If you are moving into your house from a rented property you might be unfamiliar with utility costs as most landlords prefer to add them to your rent. But when you move into your own house, you’ll have to start factoring utility bills into your budget.
These are monthly expenses for essential services like electricity, water, gas, and possibly waste management services.
These utilities are necessary for maintaining a comfortable living environment and performing daily activities such as cooking, cleaning, and bathing.
Utility costs can vary depending on factors such as the size and location of your home, the season, and your personal usage habits.
It’s important to budget for these expenses and explore ways to conserve energy and water to reduce costs.
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7. Internet and Cable
If you want to be able to access the internet and use its facilities at your leisure and from the comfort of your new home you will have to pay for internet and cable services. This is yet another expense that most landlords add to their rent so you should ensure to make plans for it as a new homeowner.
There will be monthly subscription fees charged for internet access and cable or satellite television services, providing connectivity and entertainment options for your household.
Internet service is essential for staying connected to the digital world, accessing information, and communicating with others, while cable or satellite television services offer a variety of programming for entertainment and relaxation.
I’d advise you to scout around the available internet and cable providers in your area to find the best value and options for your needs and budget.
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8. Maintenance and Repairs
These are routine maintenance tasks and unexpected repairs to keep your home in good condition, ensuring its long-term value and livability.
Routine maintenance tasks may include things like cleaning gutters, servicing HVAC systems, and maintaining landscaping, while unexpected repairs can range from minor fixes like replacing a broken window to major renovations like repairing a damaged roof or foundation.
Always set aside a portion of your budget for maintenance and repairs to address issues promptly and prevent them from becoming more costly problems.
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9. Home Improvement Projects
These are expenses for renovations, upgrades, or remodeling aimed at enhancing the functionality, aesthetics, and value of your home according to your preferences.
Home improvement projects can range from simple DIY upgrades like painting or installing new fixtures to more extensive renovations like remodeling a kitchen or bathroom.
These projects can improve your quality of life, increase your home’s resale value, and reflect your personal style and preferences.
While these might not be urgent needs, you should make sure to plan and budget for home improvement projects carefully to ensure they align with your goals and financial resources.
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10. Pest Control
The fees for professional services to prevent or eliminate pest infestations, safeguarding your home and health from the damages and risks associated with pests should also be taken into consideration.
Pest control services may include regular treatments for common pests like ants, roaches, and spiders, as well as specialized services for more severe infestations such as termites or bed bugs.
It is essential that you address pest issues promptly to prevent damage to your home and belongings and to protect your family from health risks associated with certain pests.
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11. Home Security System
This covers the initial costs for installing a security system including alarms, cameras, and monitoring services, providing peace of mind and protection against intrusion.
A home security system can deter burglars, alert you to potential threats, and provide remote access to monitor and control your home’s security settings.
Ensure you carry out extensive research on different security system options and choose one that meets your needs and budget while providing reliable protection for your home and family.
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12. Emergency Fund
This refers to the savings set aside to cover unexpected expenses or financial setbacks related to homeownership, offering a financial buffer for unforeseen circumstances.
An emergency fund can help you cover unexpected costs such as major repairs, medical expenses, or job loss without having to resort to high-interest debt or deplete your savings.
I’d advise you to build and maintain an emergency fund that can cover three to six months’ worth of living expenses to provide financial security and peace of mind.
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13. Flood Insurance
These are essential additional insurance coverage for homes located in flood-prone areas, protecting against losses due to flooding events that may not be covered by standard homeowners insurance.
Flood insurance is typically required for homes located in designated flood zones but may also be recommended for properties at risk of flooding due to nearby bodies of water, storm surges, or heavy rainfall.
Understanding your flood risk will help you to purchase adequate flood insurance to protect your home and belongings from flood damage.
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14. Waste Management
There are also fees for waste disposal services such as garbage collection, recycling, and possibly composting, ensuring proper waste handling and environmental responsibility.
Waste management services are essential for maintaining a clean and healthy living environment, preventing pollution, and conserving natural resources.
Make sure to find out and follow local regulations for waste disposal and recycling and explore options for reducing waste and promoting sustainability in your household.
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15. Lawn Care
Depending on the layout of your property, there are expenses associated with maintaining your yard, including mowing, fertilizing, and landscaping, contributing to your home’s curb appeal and outdoor enjoyment.
Lawn care services may include regular maintenance tasks such as mowing, edging, and weeding, as well as seasonal treatments like fertilizing, aerating, and overseeding.
You should invest your time and resources in lawn care to keep your yard healthy and attractive, enhancing your home’s overall appearance and value.
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16. Annual Property Maintenance
You should also budget for annual tasks like gutter cleaning, chimney sweeping, and HVAC servicing to maintain your home’s systems and prevent costly repairs.
Annual property maintenance tasks are essential for identifying and addressing issues before they escalate into major problems, prolonging the lifespan of your home’s components and systems.
Create a maintenance schedule and budget for these tasks to keep your home in good condition and avoid unexpected expenses.
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17. Homeowner’s Association Reserves
These are additional contributions towards HOA reserves for future major repairs or improvements, ensuring the long-term financial health and stability of the community.
HOA reserves are funds set aside for planned maintenance, repairs, and capital improvements to common areas and amenities within a homeowners association.
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18. Costs of Moving In
Once you know the cost of your new mortgage payments, new insurance policies, solicitor and estate agent fees, etc., make time to find out about moving-day costs.
These include the cost of renting a moving van, sometimes you’ll have to hire a relocation company to help with heavy lifting, and handymen to fix your appliances and assemble your personal effects.
Whether you’re a first-time buyer or a seasoned home mover, it’s important to know and prepare for these costs, which can be surprisingly high.
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19. Storage Costs
If you need to move your belongings urgently, for reasons like the flooding of your current home, the expiration of your quit notice, your new home not being ready yet, etc., then you’ll have to consider putting them in storage.
There are storage companies that offer storage services for people looking to keep their personal effects without imposing on loved ones, I encourage you to shop around to compare prices and security arrangements, and to get a sense of average costs before choosing one.
The next step is to estimate the length of time that you’ll need storage because prices will depend on this.
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20. Cleaning Costs
Before you move into your brand new home, you might want to give it a thorough cleaning. While some people prefer to do it with their loved ones as some sort of homeowner’s ritual, others opt for the hire option.
Whether you are planning on hiring or doing it yourself, there are still some costs. Also, if you are moving from a rental property, you must usually leave it clean and tidy.
This is to ensure you don’t break your tenancy agreement and your landlord could charge you for the cost of a professional cleaner.
Thus you should consider hiring a professional to clean your property before you leave.
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Final Thoughts
As you embark on your homeownership journey, remember that knowledge is your greatest asset. It is good to understand the bills to pay when owning a house and the various expenses associated with it.
By owning a home and taking proactive steps to manage it, you can navigate the challenges with confidence and grace.
So, embrace the adventure, seize the opportunities, and embark on this exciting chapter of your life with enthusiasm and determination.
