Buying a home is an exciting milestone, but it’s essential to remember that your mortgage isn’t the only cost to consider. At Kind Lending, we believe in helping homebuyers like you understand the full picture of homeownership. Beyond your mortgage payments, there are additional expenses that can impact your budget, and being aware of them can help you plan better and make informed decisions.
In this blog, we’ll break down some of the common expenses associated with homeownership beyond just your mortgage, so you know exactly what to expect.
Key Expenses to Consider Beyond Your Mortgage
Here’s a quick rundown of possible expenses you’ll encounter when buying and owning a home:
1. Property Taxes
Property taxes are a mandatory part of homeownership and vary based on your location. Typically, these taxes are calculated as a percentage of your home’s assessed value. It’s important to know your area’s tax rate, as property taxes can significantly affect your monthly housing costs. Your property taxes, typically, are paid through your escrow account.
2. Home Insurance
Protecting your investment is crucial, and that’s where home insurance comes in. Homeowners insurance covers damage to your property from various causes such as fire, theft, and certain natural disasters. Your lender will require proof of insurance, and the cost will be factored into your monthly mortgage payment. Be sure to shop around for the best rates and coverage options.
3. Homeowners Association (HOA) Fees
If you’re buying a home in a community with shared amenities or services, you may be required to pay HOA fees. These fees typically cover maintenance of communal areas, such as parks, pools, and landscaping, as well as certain utilities and services like trash removal. It’s important to factor these costs into your budget, especially if you're buying a condo or home in a planned community.
4. Maintenance Costs
Owning a home means you’re responsible for all maintenance and repairs, from fixing a leaky roof to routine landscaping. These costs can add up, so it’s wise to budget for ongoing upkeep. A good rule of thumb is to set aside 1% to 3% of your home’s value each year for maintenance and unexpected repairs.
5. Closing Costs
Closing costs are the fees and expenses you’ll pay when finalizing your home purchase. These typically range from 2% to 5%* of the loan amount and can include things like appraisal fees, title insurance, attorney fees, and more. While closing costs can be negotiated, it’s essential to plan for them ahead of time so they don’t come as a surprise.
Why Choose Kind Lending?
At Kind Lending, we understand that the home-buying process can feel overwhelming, especially with all the additional costs involved. That’s why we are here to help you navigate each step and provide transparent guidance to ensure you feel confident in your decision. Our team of Kind Ambassadors is ready to answer your questions, whether you’re just starting your search or ready to close on your dream home.
We aim to be more than just a mortgage lender — we want to be your trusted resource for all things home financing. With our approachable team, and commitment to service, Kind Lending is here to simplify the process and empower you with the knowledge you need to make the best financial decisions.
Frequently Asked Questions About Homeownership Costs
To help you further, here are some common questions about the expenses that go beyond your mortgage:
Q: How do I estimate my property taxes?
A: Property taxes are typically a percentage of your home’s assessed value. Your local tax authority can provide more information on the specific rate in your area.
Q: How can I prepare for unexpected maintenance costs?
A: It’s wise to set aside an emergency fund for home maintenance and repairs. Try to save 1% to 3% of your home’s value each year for these expenses.
Q: What happens if I can’t afford my HOA fees?
A: Failing to pay HOA fees can result in fines and even legal action. If you’re concerned about affording these fees, talk to your lender or HOA about potential options or assistance.
Conclusion
Owning a home is about more than just paying your mortgage. From property taxes to maintenance, there are several other costs to consider. At Kind Lending, we’re dedicated to helping you navigate all aspects of homeownership so you can enjoy your new home with peace of mind. Whether you have questions about financing, budgeting for extra expenses, or the home-buying process, we’re here to help.
Have more questions? Contact a Kind Ambassador TODAY to get the guidance you need!
*Source: The Mortgage Reports “Average Closing Costs in 2024: Complete List of Closing Costs”, https://bit.ly/4eahxyp
