Purchasing a home may be the biggest decision you make in your entire life. The way you choose to invest your money could either set you up for failure or success.
However, sometimes homeowners overlook certain costs when purchasing a home, and some don’t even know how to pay for them.
Hippo, an InsureTech company, listed five hidden costs of homeownership and provides insight on the best ways to avoid fees.
These are five hidden costs of homeownership:
- Property taxes:
Homeowners often pay property taxes when they make mortgage payments, however it’s important to note they rarely decrease. Hippo suggests if you don’t have to make property tax payments through an escrow account, you pay them in installments.
- Homeowners association fees:
Hippo warns that new homes and condominiums often come with maintenance and general upkeep of shared common areas, and sometimes monthly homeowners association fees for standard single-family homes can cost around $200 or $300. If you want to avoid paying outlandish fees, it’s probably best to learn how much HOA fees are prior to moving into a community.
- Insurance premiums:
The average annual homeowners insurance premium costs $1,120, according to the most recent data provided by the National Association of Insurance Commissioners. However, Hippo states the amount you pay is based on location and policy type. If a potential homebuyer's policy doesn’t allow flexibility, they should probably assess if rates work within their budget.
- Selling costs:
Homes need repair from time to time, so up-keeping your home can prevent you from making additional repair costs when it comes time to sell. This will also ensure you meet potential homebuyers demands, according to Hippo.
- Pest control costs:
Ever been in a home crawling with insects? It is safe to assume homeowners wished they knew about infestations before moving into the home. Hippo states the best way to avoid paying for pest control later, is taking care of it now. Simply, hire an inspector to check for bugs and termites that could potentially cause structure damage.
Did you run into any of these hidden costs when purchasing your home? Tell us about it!