Homeownership costs

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Text Text 10 Hidden Costs of Homeownership

Transcript of Homeownership costs

Page 1: Homeownership costs

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10 Hidden Costs of Homeownership

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1. Property Taxes• Property taxes average

about 1% of the home’s value.

• However, this can vary dramatically depending on where you live.

• The median property tax ranges from $538 in Alabama to $7,335 in New Jersey.

Flickr user DonkeyHotey

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2. Insurance• The cost of

homeowners’ insurance depends on several factors, such as the age and size of the home.

• In certain areas, other costly types of insurance may be required by lenders, such as flood insurance in low-lying areas.

David Hilowitz

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3. Maintenance/repairs• When you rent,

maintenance and repairs are typically the landlord’s responsibility.

• A good rule of thumb is to plan on spending 1% of your home’s value per year for maintenance.

Wikipedia user Ethoseo

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4. Furniture• If you leave an

apartment for a larger house, don’t forget that you’ll need to furnish it.

• This cost can vary tremendously, but should be taken into consideration when shopping for a home. Flickr user jinkazamah

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5. Closing Costs• Depending on the

home you buy, your location, and the type of mortgage you obtain, closing costs can run anywhere from 1% to 5% of the sale price of the home (average is around 3%). Photo: www.SeniorLiving.org

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6. HOA Fees• If your home is in a

neighborhood or condominium, you’ll probably have to pay some sort of HOA fee, which covers things like common area maintenance, street lights, and a community pool.

• Be sure to inquire about an HOA fee and take it into account when formulating your budget. Billy Hathorn

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7. Mortgage Insurance• You can buy a home

with a small down payment, but if you do, you’ll probably have to pay mortgage insurance.

• For loans with less than 20% down, mortgage insurance is generally added to your monthly payment.

www.401kcalculator.org

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8. Landscaping / Lawn Care• This is another

expense your landlord usually takes care of.

• Many homeowners are surprised at how much equipment is required to maintain a decent-sized lawn, and how expensive landscaping services can be.

Photo: Pixabay

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9. Pest Control• Rental properties

are often treated for pests several times a year.

• Paying out of pocket for pest control can cost several hundred dollars per year. Flickr user Wonderlane

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10. Inspection/Appraisal Costs• Before you close on

a home, it’s essential to get a home inspection, even if it’s not required.

• This can cost $500 or more, depending on your location and the size of the home. Flickr user R Nipper