Home ownership can be expensive! In order to make the best decisions for your own financial situation, it is important to ensure that you understand the cost of home ownership. This can help you to decide whether you should buy or rent, as well as when the right time is to purchase a home. Our team at Premier Utah Real Estate can help you to make the right decision for your particular situation. Here are a few things that you should keep in mind about the cost of home ownership.
When you purchase a home, it is important to understand that a down payment is a standard part of the deal. In most situations, you will be expected to pay approximately 20% of the purchase price of the home. For example, the down payment on a $250,000 home will be $50,000. It is important to plan accordingly for your down payment prior to purchasing a home.
Don’t drain your bank account for the down payment. This payment isn’t the only expense associated with purchasing a home. It is also important to consider closing costs. Closing costs will vary depending on your specific location and the various activities you have to complete with your closing. For example, some locations require the presence of an attorney when purchasing a property, which will result in attorney fees. Other common expenses include property inspection fees, appraisal fees, home warranty fees, homeowner’s insurance costs, mortgage points, prepaid interest, property taxes, and title insurance costs. You may also be obligated to pay credit report fees, homeowner’s association fees, recording fees, and notary fees. In general, you can plan to spend approximately 2-7% of the property’s purchase price on closing costs.
When you purchase a home, you can plan to pay a monthly mortgage. However, the principal of the mortgage isn’t the only expense included in the monthly payment. Your mortgage payment includes the principal, property taxes, interest, insurance, and any applicable HOA dues.
What can you Afford?
In order to budget for the expenses of owning a home, it is important to be aware of these expenses. Most experts agree that your monthly expenses shouldn’t exceed 28% of your gross monthly income. Another important thing to be aware of is that your mortgage payment isn’t the only monthly expense that will come along with your home ownership.
Providing maintenance to your home is an important step in keeping your property in good shape. When you plan for maintenance costs, you will often be able to prevent damage to your home. This tends to save you a great deal of money over the long run, as well as enables you to maintain the value of your property.
If you’ve rented a property, you’ve likely had to pay utility expenses. Sometimes, however, they are included in your monthly rental payment. It is important to remember that you will be responsible for paying all of the related utility expenses for your property.
Unexpected repairs are always a possibility when you own a home. In many rental properties, these repairs are covered by the landlord. When you own a home, it is often beneficial to keep some money in savings to handle unexpected repairs when they arise.
These are several important expenses that you need to keep in mind when it comes to home ownership. Our experts at Premier Utah Real Estate are dedicated to help you find your perfect home that fits your budget. Whether you want a new or old home, we have the experience to ensure that your needs are met. To learn more about the cost of home ownership or how we can help you find your perfect home, contact us at Premier Utah Real Estate today!