What are the costs of owning a home?

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Your house isn’t just one of the biggest purchases you’ll likely make; there are ongoing expenses that come with homeownership, as well. In addition to the costs at the outset — like closing costs, the down payment and moving — consider these costs of owning a home.

What are the costs of owning a home?

Home maintenance and repairs

One of the biggest costs of owning a home is maintenance and repairs. Based on the attributes and condition of the home, maintenance may include:

  • Lawn care, including mowing and watering
  • Keeping the home clean
  • Clearing rain gutters
  • Pest prevention
  • Replacing smoke alarm batteries
  • Painting the exterior of the home or replacing siding
  • Replacing flooring

Another major cost to factor in is roof replacement. In many cases, a roof can be expected to last 20 years in good condition, but some roofing materials can last up to 50 years, according to the National Association of Home Builders. The average cost of roof replacement is roughly $8,000, HomeAdvisor reports.

You’ll also want to consider the cost of maintaining systems like the HVAC. According to HomeAdvisor, having your HVAC serviced can cost between $75 to $200, and hiring a technician for a repair can run you $50 to $150 per hour.

At some point, you might also need to check for wiring and plumbing issues to make sure those systems are still in good shape. Having any issues addressed or older systems upgraded will likely require a professional, which also comes at a cost.

A home repair, on the other hand, can be the result of a natural disaster or a major failure of a system. Depending on the situation, you might be able to get help from your homeowners insurance policy — but if a major issue, such as a termite infestation or a tree branch falling on your roof, requires repair, that can cost you significantly.

HOA fees

If you live in a homeowners association (HOA), you’ll likely need to pay HOA fees, which could be charged monthly, quarterly or annually. Depending on where you live and the association, HOA fees can amount to thousands of dollars per year, and may include some maintenance, such as snow removal and lawn care, or you may have to pay extra for those services. You can check with the association to find out what fees you’re required to pay and which are optional add-ons.

Homeowners insurance 

As you add up the cost of owning a home, don’t forget to include homeowners insurance. Homeowners insurance coverage and premiums vary widely, so it’s important to shop around and compare offers. Generally speaking, if you want to save money on premiums, you can increase your deductible.

Most mortgage lenders require that you carry a certain amount of homeowners insurance to protect the value of the home, but the policy also protects you. When a covered event happens, you can rely on the insurance payout to help you make repairs rather than paying the whole cost out of pocket.

Property taxes 

For many homeowners, there’s a good chance they’ll live in an area where they’ll need to pay property taxes. Property taxes are determined by your city or county’s effective tax rate and your home’s value, which may be evaluated based on fair market value in the area or by the home’s individually assessed value. Depending on your city or county, you might pay each month, or you might end up with a bill every year or twice a year.

How to budget for homeownership

Once you have a handle on the full costs of owning a home, creating a budget is key. For some costs, like homeowners insurance, HOA fees and property taxes, you might be able to include a regular line item in your budget and plan for it each month. If you have a mortgage, you’ll likely be able to include them in that payment.

Figuring out ongoing maintenance costs and future repairs can be a little trickier. One suggestion is to set aside about 1 percent of your home’s value each year for maintenance and repairs. For example, if your home’s value is $275,000, you’d want to budget about $2,750 per year. You could break that down into a monthly budget item of $229, and keep the money in a high-yield savings account until it’s needed.

Gauging your budget for repairs may be more challenging. If you’re buying a fixer-upper, a home inspection report can provide you with an idea of how much to budget for repairs and upgrades.

You can also build an emergency fund to help you pay for home repairs and maintenance — many people find that having a separate savings account for the unexpected costs of owning a home can be helpful.  

Featured image by ArtistGNDphotography of Getty Images.

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Written by
Miranda Marquit
Contributing writer
Miranda Marquit is a contributing writer for Bankrate. Miranda writes about topics related to investing, saving and homebuying.
Reviewed by
Senior mortgage loan originator, American Fidelity Mortgage