The hidden costs of homeownership

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The Hidden Costs of Homeownership

OverviewsYou may be surprised to find out that there is more money involved in owning a house than just taking out a home loan and making your monthly payments. What you werent responsible for as a renter becomes all yours as a homeowner.

Costs of HomeownershipClosing CostsProperty TaxesPrivate Mortgage InsuranceHomeowners InsuranceDecoratingHome Maintenance and Repairs

Closing CostsClosing costs can add on thousands of dollars when your loan is settled. Those fees are often negotiated and vary state-by-state.

Property TaxesIf you live in a community that assesses its residents a special tax. Find out what your annual obligations are and budget accordingly. Otherwise, youll have a shock when those taxes and fees become due.

Private Mortgage InsuranceIf your down payment was less than 20 percent of the purchase price, you will be required to buy Private Mortgage Insurance. PMI enables you to buy a house with a smaller down payment. The insurance protects the lender against you defaulting on the loan.

Homeowners InsuranceYou cant get a loan without taking out homeowners insurance but that doesnt cover everything, especially if you live in an area where natural disasters occur. You should consider supplemental policies for floods, tornados, hurricanes and earthquakes.

DecoratingOne of the most satisfying things about home ownership is the ability to make your house look just about any way you want it.

Home Maintenance and RepairsIf you bought a fixer-upper, you pretty much know whats ahead of you. Time, sweat and money then add another 20 percent or more to the costs. But even a house in pristine move-in condition is going to need maintenance and its better sooner rather than later.