Once you’ve decided the time is right for purchasing a new home, the first thing you’ll probably do is set a budget for how much you can afford. While the purchase price of a home certainly is important, you shouldn’t rely on that number alone.
Many homeowners know to add expenses such as closing costs into their budget. However, there are many other costs that can come with a new home that people often overlook. When planning a budget for your new home, make sure you remember to factor in the following:
Higher utility bills
If you’re looking for a home with more space, keep in mind those extra rooms will add to your heating and cooling bills. Additional rooms also mean more lights and other items using electricity. Even if you’re not moving into a larger home, it’s still important to think about how utility bills may change. Something as simple as switching from gas to electric or vice versa can mean an unexpected surprise when the first bill comes.
Lawn maintenance costs
If you’re planning on buying your first home, that probably means you’ll need to buy your first lawnmower, weed trimmer, sprinkler and so on. Keeping the lawn green may affect your monthly water bills; so don’t forget to budget accordingly. If your new home will have a larger lawn, you may also want to consider what a lawn service would cost, in case you decide caring for all that extra turf is too hard to handle on your own.
New appliances and repairs
If your new home will come with appliances, that certainly can be a bonus. Over time, those appliances may need repairs, especially if they are not brand new. Or, you may decide the refrigerator or dishwasher in your new home needs an upgrade.
No one wants to move into a new home and discover an uninvited colony of ants in the kitchen. While home inspections can help catch pest problems, they’re not 100 percent foolproof, especially since some critters prefer to come out at night. Make sure you have wiggle room in your budget to pay for the removal of any such unwelcome guests you might discover after moving in.
Just because a home is move-in ready when you purchase it, doesn’t mean it will stay in perfect condition forever. Every homeowner should plan for unexpected repairs on an annual basis. A good rule of thumb is to budget one to two percent of your mortgage per year for repairs.
Of course, a new house means a new home insurance rate. However, it’s important to think about how a new home will affect other insurance policies as well. If it’s important to you to have a life insurance plan that can cover the remainder of an existing mortgage, a new home may mean you’ll need to increase your existing coverage. If you need help making insurance decisions, our Capitol Agency Insurance representatives will gladly help design a coverage plan that’s right for you.
Many people overlook how quickly extra costs can add up before you’ve even moved into a new home. If you’re planning on using a moving company, research what the costs will be for labor, trucks and mileage so you’re not surprised when the bill arrives. If you’re skipping the professional movers and relying on the help of friends, don’t forget you’ll need to entice them with drinks and snacks.
Once you’re moved in, you’ll want to make the new house a home. This may mean new curtains, additional furniture, pictures to cover the walls and more. When looking at potential homes, factor in how much more stuff you’ll need to buy to make it a comfortable space for your family.
Can you think of other unexpected home ownership expenses? Share them here!