You worked hard to save up enough money for a down payment, built good credit, and you’re finally ready to purchase your dream home. Being a homeowner comes with many financial obligations that you need to be prepared for. Not sure what to expect once you make the leap? Read on to learn more about the financial responsibilities that go hand in hand with owning a home.
Property Taxes & Insurance
As a homeowner, you’re responsible for paying annual taxes and insurance on the property you own. Depending on the location of your home and the terms, these fees can be paid monthly, quarterly or yearly. Make sure to add these fees into your family budget.
Often, these fees are bundled into your monthly mortgage payment and held in an escrow account, and the mortgage company pays them for you each year. If you choose to pay taxes this way, be prepared for your mortgage payment to be a little higher each month to cover the taxes and insurance.
Lenders will estimate your homeowners insurance and property taxes yearly. Remember, this is an estimate so you may receive a refund or have to pay extra at the end of the year.
If you’ve been renting for a while, you may have been lucky enough to have a top-notch landlord who has been paying most of your utilities such as water, garbage, and sewer. You might have only been paying your electric bill. As a new homeowner you’ll be responsible for paying all the monthly bills, including some that you might not have even thought of: electricity, gas or oil, water, sewer, trash pickup, landscaping and snow removal.
Maintenance and broken items around the home changes quite a bit once you become a homeowner. No more text messages or calls to the landlord or maintenance department to get items fixed at no expense to you. If you wake up to a broken water heater, it’s time to Yelp a few local plumbers to come check it out. You’ll be the one to pay the bill and purchase a new water heater. As a homeowner, it’s important to have a cash fund available for emergencies – you never know when you may need to fix a leaky faucet, a broken lawn mower or buy a new refrigerator.
And of Course, Paying Your Mortgage
This one is a bit obvious, but don’t forget… every month you’ll need to make your mortgage payment, in full and on time. It’s very important to stay on top of your payments and make timely payments every month. A few late payments and you may be finding yourself doing a bit more research on foreclosures and shore sales.
If you’re ready for homeownership, it’s time to take advantage of these historically low interest rates. If you’re in the market and need a bit more information, click here or give our qualified mortgage experts a call at (877) 706-5856.