The Hidden Costs of Homeownership

When we were first-time homebuyers, I got my hands on an amortization calculator and played with it until I found our ideal monthly mortgage. I felt a little let down when I discovered there are other costs that factor into a house payment. I don’t want you to be disappointed like I was. Savvy buyers will consider these factors in their purchase decisions.

TAXES

Texas consistently ranks among the highest in the US for property taxes because there is no state income tax. Property taxes vary by area & are calculated as a percentage of the appraised value. Pay attention to MUD, PID, PUD and other assessments. File your homestead exemption. If your tax appraisal seems too high, protesting it is an option.

HOMEOWNERS INSURANCE

Lenders require insurance to protect the asset. Rates have risen following quite a few natural disasters. It’s a good idea to get a quote during the early stages of considering a property.

LOAN COSTS

There are costs to set up your loan. Some loans also carry Private Mortgage Insurance (PMI). There are amazing programs that can help you achieve home ownership like Down Payment Assistance, but they may have a cost in the long run. There is an initial cost to buy down your interest rate, but it can help you save money.

TITLE COSTS

Title Companies are responsible for investigating ownership or claim to a property. There are fees associated with transferring ownership to a buyer.

HOMEOWNERS ASSOCIATION FEES

While this cost isn’t usually a part of a mortgage payment, it is a monthly or annual fee to consider. There may also be fees when you buy or sell in a deed restricted community.

MAINTENANCE & REPAIRS

You are your own maintenance crew. Ordering a Home Warranty while you’re buying can offer some peace of mind.

Don’t be discouraged by this long list. Knowledge is power. It’s important to be aware of these costs to set yourself up for long term success. Considering these factors before you make an offer can save you hundreds or maybe even thousands of dollars you’ll spend while under a purchase contract. A great REALTOR® / Lender team can help you find the right home that fits your closing and monthly budget.