Being a homeowner has been your dream since you were a kid and you finally accomplished it.
Then, moving day comes. Once all the boxes are unloaded, and the furniture is shoved roughly into the right rooms, you grab a coffee and take a breather. And that is when it dawns on you. This is only just the beginning.
As a new homeowner, there are whole lists of things you need to take care of, and almost all of them cost money.
So, if you are planning to buy a new home, have just signed the paperwork, or are moving in next week, this list is for you. And if you know someone who is moving in, be a friend and give them a heads-up as well.
Property Tax – Up to $10,000: When it comes to property tax, a lot of people get sticker shock a year after they move into a new construction. The reason for this is simple; the taxes are based on the empty lot the home was built on says, Local Records Office. But a year later, the assessors come around and put a new valuation on the lot, which now has a beautiful home sitting on it. You can also face much higher taxes based on the particular school district you live in. And of course, taxes vary greatly by state. The average property taxes paid in New Jersey are almost $7,500, as opposed to $1,500 in Colorado, as of 2017.
Major Appliances – Up to $10,000: New home builds usually include a dishwasher, microwave, and stove, with the option of a fridge/freezer, washer, and dryer. They are basic unless you opt for the upgrades in your contract, but if you do, they could add a chunk to your monthly mortgage payment. If you buy a used home, you may not have any appliances included.
HOA Fees – Up to $700 a Month: Many new homes come with a Home Owners Association, and most used homes have HOAs as well. In theory, they’re a sound idea. They are there to keep the neighborhood looking great, and deal with trash collection, playgrounds, community pools, street lighting, common areas, snow removal, and so on. A typical HOA can run $100 a month. Some are just a few hundred a year, while in the higher-end neighborhoods, you may not see much change out of $1,000 every month.
Insurance – Up to $2,000 Annually: There are a few different types of insurance you need to have when buying a home. First, you must have homeowner’s insurance. The average cost of this is around $700 annually, but this varies by state. You should also have contents insurance, based on the value of your possessions. You could, of course, skip this payment. But if tragedy does strike, you could lose everything.
Utilities – Up to $400 Monthly: Again, if you live in a mansion that figure will be greater. And in a new one-bedroom apartment, much less. But on average, when moving into a new home, you will see utility bills in the hundreds of dollars. This can be quite a shock, especially if you were formerly in a small apartment or even living with your parents.
Repairs and Maintenance – Unknown: One of the biggest unknown expenses of owning a home is the repairs and maintenance costs that can hit you out of nowhere. If you were formerly renting, that was all taken care of. Now it is all on you. If the hot water heater goes out, you pay. If the roof leaks, you pay. If strong winds blow your fence down, you pay.
Yes, being a homeowner is the American dream, but it does not always come cheap. There are a lot of hidden fees and expenses. If you make a plan to cover these expenditures, then you will be a well-prepared homeowner. ***