First-time buyers should be aware of these expenses
As you get ready to start your search for your first home, you know you need to keep budget in mind. A common rule of thumb is that your income should be about two or three times larger than your expected mortgage payment. However, there is more to the home-buying bottom line than just the mortgage.
Consider these additional home ownership expenses when buying a home:
Property taxes
Taxes on your new home will vary depending on the size of the home, assessed value, location and more. This chart gives you an idea of how much these taxes can vary from state to state, and your real estate agent can help you locate specifics for the neighborhoods or properties in your target area.
Private mortgage insurance
PMI for short, this insurance is applied to your mortgage by your lender if you have a low down payment or don't meet other requirements. It helps offset the lender's risk. You can generally ask your lender to drop PMI once you reach 20 percent equity in your home, but be sure to review the details before signing.
Home insurance
Most mortgage lenders will require you to carry home insurance, which will add to your overall mortgage payment each month. Get quotes from several insurance providers and ask for discounts that might apply to you.
Closing costs
From title fees to inspections, a number of fees go into closing costs. Your real estate agent will outline these expected costs for you before your deal is final.
Maintenance
The cost of maintaining a home sometimes comes as a shock, especially to former renters. When you own a home, there is no landlord to replace a furnace or water heater. If you are moving to a home from an apartment, or upsizing, factor in added utility costs to heat and cool the home, as well as water the lawn.
These expenses can vary by county or neighborhood. Different mortgage options can also impact the bottom line. Work with your real estate agent to assess the affordability of any home you plan to buy. He or she can help direct you to the options that will work best for you without breaking your budget.
If you are buying or selling a home in Steamboat Springs, contact us. We will put our nearly 30 years of experience to work for you.