As the economy improves many young people are opting out of rentals and looking at purchasing their first home. Buying a home is a big step, and one of the greatest benefits to home ownership is building your own equity as opposed to building a landlord’s. It’s important to remember, as you’re budgeting for the size of house you want, the mortgage payment isn’t the only expense to consider.
Taxes and Insurance
Sometimes the taxes and insurance, which are both large payments due once a year, are wrapped into the mortgage payment. This is a service your mortgage lender provides to make it easier to save during the year.
Shop around for insurance, and if you opt to pay your insurance separately, be sure you make your payments on time. Otherwise, lender placed insurance will end up being more costly while providing less coverage. The mortgage company will make sure their investment is protected.
With the change of each season, your home will require upkeep. You’ll need lawn equipment, unless you plan to hire someone to maintain your lawn. Have your HVAC inspected prior to switching over between cooling and heat, and regulary change the filters.
Consider these expenses when you’re deciding how much home you can afford. With home ownership comes necessary additional expenses. Be sure to avoid those unnecessary additional expenses such as lender placed insurance.