What Expenses Come with Homeownership?

Everyone knows that buying a home can be expensive, but it is important to have a handle on all the costs that you’ll be paying, month-to-month in many cases. Running your household takes time and money, but the more you’ve prepared for it the easier it will be. Here are the most important expenses that you need to know about before you decide to take the plunge and purchase a home of your own.

Mortgage Interest 

However much your home costs, it will also come with interest if you’re paying back a home loan. Most people are in this boat, since it is very difficult to have the money to purchase a home up front. Interest rates can either vary or be at a fixed rate depending on the agreement you sign, though it will depend on the market generally and your personal credit history regardless. It’s important to be prepared for interest since most of your mortgage payment each month will actually go towards that interest rather than to the principal of your home. Securing a good interest rate is essential to eventually own your home.

Property Taxes 

In addition to paying your mortgage each month, you will also need to pay yearly taxes on your property. This amount is determined by property values around your home and can change from year to year. It’s important to note that you will generally pay for your property taxes with your mortgage payments, so you won’t have to come up with the money at the end of the year. Instead, you will simply put money towards those taxes each month and at the end of the year the total will be determined. As property taxes change, sometimes you will need to pay an additional amount at the end of the year, and sometimes you will have paid too much so you will get a little money back. The bank works off estimates to guess at the total property taxes and will adjust those estimates each year.


There are a few different insurance costs that you will need to pay as a homeowner. If you have a mortgage on your home, you will likely need to pay for mortgage insurance on behalf of your lender. This protects them in case something happens with your property and you are unable to finish paying off your loan. You may also be required to pay for home insurance that covers your property and the home itself. If you want to have protection for your belongings in the case of an emergency, you may want to extend your policy to protect the contents of your home as well.

Repair Costs 

Since you will not have a landlord to take care of your home for you, you will also be required to cover your own repair costs. These costs can vary but taking care of maintenance on a regular basis can help you to avoid more expensive elements of repair costs. These costs can range from the inside of your home to the exterior and even your driveway and yard. For instance, asphalt paving must be sealcoated or else it will sustain damage during temperature changes. Taking care of all your maintenance on a regular basis will protect you from larger costs down the line.

HOA Fees 

If you live in a condo or certain neighborhoods you may also have an HOA fee that you need to pay each month. Depending on the amenities your area offers, HOA fees can range pretty widely. The fees tend to go towards beautifying the area, maintaining the exteriors of condos, and covering the expenses of whatever amenities there are like a pool or clubhouse. If you don’t want to deal with HOA fees you will need to choose a property carefully and make sure you’ll be living in an area without it.

Utility Costs 

As a homeowner you will also be responsible for paying for utilities. In most cases this means paying for gas, electricity, water, trash, and recycling, among other things. While these costs are necessary in most cases, there are a few things you can do to reduce them. First, you can invest in more sustainable power options like solar. You can also improve the efficiency of your home and invest in Energy Star approved appliances, so you use power more effectively.


While some homes come with appliances in them, in many cases you will need to pay for at least some of your appliances. This can range from your dishwasher and oven to your washing machine and any other appliance. These costs can really add up, so it is important to make sure you are prepared in advance. You can sometimes find a deal on sets of appliances or even find them second hand for a reduced price. If you do go the secondhand route, it is worth it to make sure that you have a warrantee or are prepared to pay for repairs sooner rather than later.

Furnishing Your Home 

You won’t be able to live comfortably in your home if you don’t have furniture to use each day. Furnishing your home can take time and requires access to a pretty serious budget. It is important to shop around for good deals so you can get high quality furnishings on your budget. Finding the right deals can take time, but if you stick with it, it makes a real difference for your home. You can also bring old pieces from your previous home, but in many cases people are upsizing, so they still require more furniture than they had before.

The costs of homeownership can feel overwhelming, but it comes with many positive benefits. It’s important to remember that great freedom comes from having control over your own living space. Budget well so you can really enjoy the home you make for yourself.

Read this next: Potential Sources of Income Lying Around Your House

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