Can You Really Afford To Own A Home?
It can be an exciting thought to be finally able to own your own home. You may have been saving for years, and keeping your financial records squeaky clean. Your household budget may be in good order, and you may even have all the removal costs detailed. Finally, you find the house of your dreams. All you need to do now is convince the mortgage company to give you the loan you need.
Saving the deposit may be the least of your worries in the long term, though. There are dozens of other costs you will incur when you buy a house. Having a healthy twenty to forty percent of the asking price sets you on the right track. Proving you can afford the monthly repayments is all the bank may ask for in a good financial year. But owning a house comes with far more costs than just the mortgage repayments.
There will be taxes to pay. The first will be the tax from buying the house in the first place. This could be a very expensive bill running into several thousand, depending on where you live. You will also have taxes to pay on your property lawyer’s bill, the realtor may charge you a fee and the removal firm will also need to add tax to their bill. Some areas have local government taxes to pay either monthly or annually. This too can be a very expensive bill.
If you are moving to a new area or a bigger property, chances are it will cost more on your energy bills. Heating or cooling a larger property usually means a bigger bill. It is essential you maintain those facilities as well. There is no landlord around to make repairs or replace a faulty heating service. HVAC company Enviro Air suggest air conditioning appliances should be serviced and maintained twice a year to prevent expensive replacement and repair bills.
The cost of calling a plumber or electrician out in an emergency can also cause problems when you’re on a tight budget. Having an emergency fund can save you from falling short or having to borrow money. Try to budget each month a healthy sum you can keep adding to that pot. If you end up having an expensive boiler replacement, you know that most of that cash are available from your emergency fund.
Home improvements are something most homeowners want to do. New kitchens and bathrooms can be incredibly expensive. Just decorating your new home, so it is fresh and to your taste will require a healthy budget. It can be a good idea to have a savings pot for home improvements. That way you can save up for the changes you would like to make. Borrowing the money could help you to make those changes more quickly, but you would have to consider the interest charges. Are you adding enough value to your home to cover those costs?
Accidents happen. Sometimes something gets smashed or broken like a window or an appliance. You may have ruined the carpet with a stain or damaged the flooring when you dropped something on it. Replacing these things can leave you out of pocket. Accidental damage insurance policies can help you out in these situations. Many insurance policies can also be paid for monthly so you are spreading the cost. However, most insurance policies require you to pay an excess fee should you need to claim. This could still be quite tough to find in an emergency.
Part of maintaining your home means that you keep it clean and presentable all year round. There are some jobs that are better left to the professionals to do. You will need to pay them a fee to come and do tasks like gutter-clearing, window cleaning and tank emptying. While you may be able to do some of these jobs yourself, you are likely to need specialist equipment to do it. It could be worth considering the time it costs you too, away from your family.
Gardening is something many people enjoy. It keeps you physically fit, and it’s a great hobby to do. Just as many people hate gardening because it’s physically demanding and requires regular attention. Whether you hire a gardener or do it yourself, there are costs associated with having a yard of your own. A lawn mower is an expensive purchase and will require maintenance each year. You may need to purchase new plants and garden furniture every couple of years too.
Of course, as a homeowner, you now have the freedom to save money in lots of ways. As a tenant, you didn’t have the freedom to change the layout or decor of your rented home. Part of your rental charge would have included maintenance of the property and decorating costs each year. Now you can decide when and how much you spend on decor. And if you don’t want to spend anything this year, you won’t be charged.
You also have the freedom to install solar panels. Why not change to eco-radiators and other environmentally friendly additions? These will all save you money too in the long term. In the garden, a water harvesting butt will ensure you never have to pay to water your garden again. You can choose PIR solar powered security lights, so you don’t have to pay any electricity charges for the outdoor lights. And if you do drop wine on the carpet, you’re not under obligation to replace it if money is tight. It’s yours to do as you please.
The best way to ensure you can truly afford to buy a house is to consider everything you may face as a homeowner. The more detailed the list, the less likely you’ll have any nasty surprises. Plan ahead with your budget. Make sure you have plenty of savings set aside for emergency repairs. Watch your energy usage closely so you can accurately budget for those bills. And be sure you know exactly what insurances and taxes you are liable to pay each month. Finally, remember that your mortgage payments may fluctuate quite wildly at times. Be sure you have a contingency to cover your repayments. Enjoy your beautiful new home.
