5 Surprising Costs to Homeownership

5 Surprising Costs to Homeownership

It’s no surprise that it costs a lot to own a home, but homeownership might actually be more than you think. There are some costs that everyone considers, such as homeowners insurance and a mortgage. But then there are all the other costs that can catch us off guard.

1. National Flood Insurance

There are five million homeowners that are required to carry flood insurance. The program is in desperate need of repair, but until that happens homeowners are stuck paying high premiums. On April 1st the average rose by 6.3%, up to $878. Congress has until the end of September to re-determine what homeowners should be paying.

Make sure to find out if the house you are looking at will require you to have flood insurance.

2. City and County Taxes

There can be a big difference between the tax rates from one city to another and one county to another. Before buying look into the taxes in the area. Also look into the historical tax hikes and if there are any rumors of impending tax rate increases in the area.

3. Local Assessments

The type of local assessments that you will face will depend on the area that you live in. Make sure you understand what assessments you will be charged if you buy in the area.

4. Waterfront Fees

There is something special about waterfront property to many people. The ability to have a dock so you can keep your boat and other toys directly in the water is a big advantage. However, there are some areas that are now charging homeowners because their docks are on property that is considered owned by the city.

Before purchasing property, be sure that you check with the local agencies to make sure you know who owns what property and what type of easements are available.

5. HOA Fees

Yes, you probably are familiar with HOA fees; however, many association fees are on the rise. Not only are you paying for the services that you receive plus the cost of upkeeping the common areas, you might be paying for those that don’t pay.

If you are purchasing a house with an HOA, you need to know what your fees are and how they decide when to increase or decrease fees.

The point of this is not to scare you away from homeownership. However, it should be an eye opener to how much due diligence you need to do in order to be prepared for the fees you are responsible for paying.

This will allow you to catch any fees that are higher than you are comfortable paying. Or at the very least it will help you budget for them and not be surprised by them once you own the home.