A common problem many first-time home buyers encounter after they purchase their first home are the other hidden costs outside of their mortgage payments that they did not expect to be paying. We will discuss some of the most important and frequently missed hidden costs that come with purchasing a home and getting a mortgage that you should know.
Homeowner’s Insurance
While homeowner’s insurance is not really a hidden expense, as most mortgage companies will require you to acquire some form of homeowner’s insurance, the problem lies in the potential for raised premiums and disasters that are not covered by your insurance.
Premiums on homeowner’s insurance often rise on an annual basis, so you should plan for your rates to rise in the future when budgeting for the purchase of your new home and all its associated costs.
Another problem with homeowner’s insurance is the fact that it will not necessarily cover certain disasters such as floods, earthquakes, hurricanes, and in most cases water damage resulting from storms. This means you will have to get even more insurance plans to cover these specific kinds of disasters, which can add quite a lot to your new home’s total upkeep expenses.
Property Taxes
Property taxes are also an expected expense you should already be anticipating with the purchase of a new home, but the actual amount you pay can be unexpectedly high depending on where you live. This is because property taxes are determined by the local authorities of the region in which you live rather than the bank.
In House Systems
From plumbing and heating to electric and air conditioning there are many systems in your house that will likely need some form of repair and replacement during the time that you are living there.
In order to make sure your home is safe and up to standard, you should have your Heating, Ventilation and Air Conditioning (HVAC) systems inspected annually. These annual inspections could lead to a poor report, and increase the cost of your home as you pay for new units to replace the outdated systems.
An old electrical system can also be dangerous and potentially add to the cost of your new home as faulty wiring and electrical faults are a common cause for fires in homes. A big reason why this can be a big cost for homeowners is because it is always a better idea to hire and pay a professional electrician to take a look at and repair your home’s electrical system. In the hands of a novice, you may end up causing even more damage and potential harm to yourself and your loved ones in the process.
Unlike working with electrical, it is much safer to work on your own plumbing, assuming you have the knowledge to fix problems in your plumbing network appropriately. However, if you still feel out of depth when it comes to plumbing issues, or if you purchased an older home with larger scale problems, you may find yourself with another significant cost should you choose to hire a plumber to take a look at your home.