Owning a home comes with various hidden costs that go beyond the monthly mortgage payments. It is important to budget for maintenance and repairs to prevent unexpected financial burdens. Here are some key points to consider:
1. Budgeting for Maintenance and Repairs
Financial experts suggest budgeting for 1% to 2% of your mortgage balance as a yearly maintenance and repair fund. However, the actual amount you should save depends on factors such as your home’s age, condition, and size .
Regular maintenance, repairs, and replacements should be budgeted for to prevent unexpected financial burdens .
Hidden costs like home improvements, insurance, maintenance, and taxes can eat up more of your homeownership budget than your mortgage .
Some of the ongoing home maintenance expenses to consider include HVAC servicing, wiring and plumbing issues, and pest control .
Homeowners Association (HOA) fees may also be applicable if you live in an HOA community .
2. Other Monthly Costs of Homeownership
In addition to the mortgage payments, there are other monthly costs associated with homeownership. These may include taxes, homeowners insurance, private mortgage insurance (if you have an FHA mortgage), HOA fees (if applicable), heating and cooling costs, electricity, and water bills .
If you have taken out a home equity loan or a home equity line of credit, you may also have monthly payments for those .
3. Examples of Maintenance and Repair Costs
Home maintenance and repair costs can vary depending on the specific needs of your home. Some examples of maintenance and repair costs include:
Roof replacement: The lifespan of different types of roofs can vary, ranging from 12-75 years.
Home exterior repainting: The frequency of repainting can depend on the material used, ranging from 3-20 years.
Water heater replacement: The lifespan of water heaters can vary, ranging from 8-25 years .
4. Importance of Budgeting
Budgeting for maintenance and repairs is vital to prevent unexpected financial burdens and ensure the long-term upkeep of your home .
It is recommended to set aside a portion of your budget specifically for home maintenance and repairs .