10 Expenses to Expect Beyond Your Mortgage Payment
The world would be a simpler place if the only expense you had were your mortgage or housing expenses. But life isn’t free or that simple — especially when you own a home. That’s why we’ve compiled 10 expenses you’ll likely have beyond what you owe on your home loan.
1. Property Taxes – While you can choose to have your property taxes paid each month through your mortgage payment, you will still pay it, whether you know it or not. The amount of tax you will pay on your home fluctuates year to year and depends on where you live as well as the assessed value of your home. To get a more accurate picture, visit smartasset.com.
2. Rural vs. City – There are certain expenses to consider if you live within or outside of city limits. Typically, if you live in a more rural area, you can avoid some city taxes, but you still pay state and county taxes. Not paying city taxes can mean you don’t pay for sewage, water, and garbage services, but then you must maintain a septic tank for sewage and a well for water. These can be expensive to maintain, especially if something goes wrong.
For garbage and recycling services, you will have to arrange for a private service provider that can either be cheaper or more expensive than the city’s amenities. Also, in rural areas, your property easement may require that you maintain a private road or driveway, something that the county doesn’t always do. In order to keep your access points in good condition, you may have to pay for gravel, grating, or paving.
3. Homeowner’s Insurance – Unless you paid for your house in full with cash, you’ll be required to carry homeowner’s insurance. Typically, your insurance payment is bundled with your mortgage each month and then your lender will make a lump payment to the insurance company once a year. The best way to save on home insurance is to shop around. Rivermark Insurance Agency can help with all of your auto and home insurance needs.
4. Private Mortgage Insurance (PMI) – PMI is usually required when you have a conventional loan and make a down payment of less than 20 percent of your home's purchase price. Not many people can afford a down payment of 20 percent or greater, so PMI is a common expense beyond your regular mortgage payment. However, once you reach 20 percent or more of equity in your home, you can ask your lender to remove the PMI.
5. Homeowner’s Association Fees (HOA) – Many neighborhoods are making it more and more common to require a monthly or yearly HOA fee to pay for neighborhood maintenance. The maintenance typically covers common areas such as neighborhood pools, parks, sidewalks as well as exterior maintenance and landscaping. Be sure to ask about HOA fees and restrictions before you buy a home to be sure you can afford the fees and adhere to the guidelines.
Have Questions About Home Loans?
Our home loan resources page can help you make informed decisions as you prepare to purchase a home or apply for a home equity loan. And, as always, you can call Rivermark and speak directly to a mortgage expert by calling 503.906.9497.
6. Internet – Internet has become a necessary expense and most areas have easy access. However, if you live in an area where there isn’t easy access, be prepared for some expenses to get you set up, especially if you are in a more rural area.
7. Utilities – When looking for a home, consider the type of heating and electricity that’s available. Natural gas is a more common option, but if your home is not connected to the main line, it can be expensive and require some excavation and added costs in order to create a hookup. Other utilities such as water and sewer expenses depend on your city and county.
8. Maintenance and Improvements– To keep your house in working condition, it will need the typical seasonal maintenance. You want to account for a yearly budget of about one to two percent of your home’s value. This should cover preventative maintenance, landscaping, painting, deck staining, appliance and water heater maintenance, insulation, etc. If you have a larger project that requires more financing, Rivermark offers the flexibility of a Personal Loan.
7. Long-term Repairs– No house is perfect. Even when you’re buying a brand new home or you’re building your dream home, there will be repairs. If you know your home is due for a major repair in another couple of years, you can begin to save up or research low-interest loans to finance the repairs. You can also explore home equity loans or home equity lines of credit, which can provide you financial flexibility. Rivermark has plenty of options, including Home Equity Loans and Lines of Credit.
10. Emergency Fund – No one wants their pipes to freeze or their roof to leak, but life happens, and it helps to put money aside each month just in case. To start an emergency fund, simply open a savings account and put money into it every month. You’ll want to save enough to cover three to six months of mortgage payments.
Rivermark Makes Home Ownership More Affordable
Life has a way of derailing the best-laid plans. The Rivermark mortgage team can help you plan ahead, and more easily afford to be a home owner. Check out all the options online, stop by any branch, or give us a call at 503.626.6600 or 800.452.8502.