Costs First Time Homeowners Should Budget For

At Prime Custom Builders, we delight in helping families of all sorts into their dream homes, including first time homebuyers. That said, there are several unexpected costs that first-time homeowners may be surprised by when they purchase their homes. It's essential to be prepared for these expenses to avoid financial stress. Here’s what you should anticipate budgeting for when you buy your first home.

Property Taxes

While property taxes are not entirely unexpected, their annual cost can be higher than anticipated, especially for those moving from a rental situation. Property tax rates vary by location and can increase over time, affecting your housing budget. Just be sure to anticipate this.

Home Insurance

Homeowners insurance is a requirement for most mortgage lenders, and the cost can vary depending on factors like the location of your home and the coverage you choose. Premiums can increase due to factors such as a home's age or its proximity to natural disaster-prone areas.

Private Mortgage Insurance (PMI)

If you don't make a down payment of at least 20% of the home's purchase price, you'll typically be required to pay PMI. This can add a significant monthly cost until you build enough equity in your home to eliminate the insurance.

Maintenance and Repairs

Homeownership brings ongoing maintenance and repair costs that renters typically don't face. You may need to budget for expenses like lawn care, snow removal, gutter cleaning, and repairs for appliances, plumbing, or HVAC systems. Having an emergency fund for unexpected repairs is crucial.

Landscaping and Yard Maintenance

Maintaining your outdoor space can be more labor and cost-intensive than anticipated, especially if you have a large yard or complex landscaping needs. Costs can include mowing, weeding, mulching, and seasonal plantings.

Furniture and Appliances

Moving into a larger home or one with different dimensions may necessitate new furniture and appliances. Outfitting your home with these items can be a significant upfront cost.

First-time homeowners can better prepare for these unexpected costs by creating a comprehensive budget, establishing an emergency fund, and seeking advice from experienced homeowners and real estate professionals. Having a financial cushion and a well-planned budget can make homeownership a more manageable and less stressful experience. Hopefully this list helps you feel better prepared for the future. And if you still need help finding your dream home, look no further than Prime Custom Builders.

By Prime Custom Builders 10-31-2023