Ramsey Solutions financial expert George Kamel has the following advice for anyone looking to trade their monthly rent payment for a mortgage: “Do not buy a house until you know exactly what it’s going to cost you.”
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You don’t want expensive budgetary surprises after committing to a home loan. In a recent video, Kamel said by considering the following seven sneaky costs of homeownership, you can better determine how much money you’ll actually have to save before you buy a house.
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Homeowners Association Fees
Neighborhoods governed by homeowners associations (HOAs) have rules that can help protect property values and may offer attractive amenities, such as community pools, fitness centers and playgrounds. But they also come with fees, which can increase over time.
These fees vary greatly, depending on where you live and the amenities and services the HOA provides. However, the national monthly average for a single-family home is $244, according to a Rocket Mortgage survey.
Before making an offer on a home, Kamel said you should determine whether there’s an HOA and, if so, calculate the fees into your budget.
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Utilities
Don’t be surprised if your utility bills are higher when owning than when renting.
Your utility expenses depend on the size of your home, your usage and other factors, but the monthly average for homeowners is $400, per Inspire Clean Energy. This figure includes natural gas, electricity, water, garbage collection, internet and cable.
Most sellers are probably more than happy to share their monthly utility costs with potential buyers, so don’t be afraid to ask when home shopping.
Lawn Care
Expect to pay $100 to $500 monthly if you hire a lawn care service, per Angi. The national average is $300.
You can save by caring for the yard yourself, but you may not own any lawn equipment if you’ve been renting. So you’ll still have the expense of acquiring the necessary tools, of which the most expensive is often a mower. Kamel recommended checking Facebook Marketplace and Craigslist for a used one.
Maintenance and Repairs
When you rent, the landlord covers the maintenance and repair costs. These expenses fall on you as a homeowner, though. “This can be one of the biggest adjustments when you go from renting to owning,” according to Kamel.