The Savings Game: Precautions for new home buyers
If you are buying a home or for the first time, it is very important to understand the necessary costs of being a homeowner beyond the down payment and mortgage costs.
You have to understand the costs of home insurance, property taxes, maintenance, utilities, association expenses and other costs you might not anticipate.
Home insurance
When you are looking to buy a house or condo, be sure to obtain actual insurance quotes for properties you are considering. A ballpark estimate of annual insurance cost of insurance is 0.5% of the value of a home. But get actual costs, not an estimate.
Take into consideration whether the area you are considering is prone to natural disasters such as hurricanes, tornadoes or wildfires. The annual cost of home insurance in areas prone to natural disasters could be three times, or more than the national average.
You should also consider that in subsequent years, because of inflation, the costs are likely to increase, not decrease.
Maintenance
According to a Zillow and Thumbtacks report of 2023, routine home maintenance averages about $500 per month. If you are purchasing an older home, you should estimate the cost to be higher. These estimates refer to appliance repairs and lawn care. The cost of a new roof, air conditioning, water heaters and the like would be more expensive, so you should take into consideration the age of those items. Many experts recommend estimating a budget of 1% per year to cover large items. You can review real estate websites for additional estimates.

