The Costs of Owning a Home
Beyond the expenses that come as mortgage closing costs, what are the other expenses associated with home ownership? Are you prepared for them? Do they fit into your monthly budget? What about time, can you devote the time required to maintain your home?
Let’s analyze this further.
Once again, we are analyzing the costs of living in a home, not the closing, moving and legal costs. These costs are made up by:
– Yearly Property Taxes
– Yearly school taxes
– Home insurance
– Energy costs
– Other utility costs (e.g. water)
– Internet, cable, phone etc.
– Condo fees
The above amounts to hundreds of dollars that you would have to dish out monthly. Are you able to meet those expenses along with the expense of your mortgage?
Your property taxes can cost thousands of dollars a year (usually 1% of the value of your home). It is possible that your insurance costs can hit the 4-digit level as well.
RBC says that home ownership costs are on the rise – does your budget account for potential increases in home ownership costs?
Other Potential Expenses:
Beyond your recurring yearly and monthly costs as a home owner you will find that there are many maintenance costs that your budget must account for.
You need to be prepared to cover the following costs:
– Roof maintenance
– Furnace break down
– Appliance replacements and repairs
The moral of the story? Despite all of the many expenses that come with home ownership you will have to set money aside for savings. This will protect you in the event of an unexpected maintenance cost and it will also protect you if ever you find yourself unemployed or at a loss in income.
Also, when budgeting, don’t forget to account for other expenses, these can include…
– Car payments
– Driver’s license renewal
– Winter tires
– Car repairs
Don’t let this scare you!
All of these expenses might seem daunting, but don’t let them scare you! They are the normal set of expenses that come with home ownership. They illustrate why budgeting is so important and why you need to ensure that the home you buy is the home you can afford.
If you are thinking of purchasing a home then speak with a Loans Canada home buying specialist. He or she will be able to help you set the appropriate budget for your home and mortgage so that you can focus on the things that matter most to you.