While there are definitely benefits of owning a home — 60 percent of Americans do —there is a downside and that’s cost. You might think after saving for a down payment for a North Scottsdale home for sale, you won’t have to save anymore. Unfortunately, there are many costs associated with owning a home and you’ll need to continue to save.
Start a new budget
Chances are, when you’re looking for a North Scottsdale home for sale and end up buying one, you’ll need to adjust your budget due to your monthly expenses going up. Not only will your mortgage payment likely be higher than apartment rent, you might now have a lawn to take care of or pool chemicals to buy. You might not have as much left over for entertainment or eating out. That’s why creating a new budget is important.
Money will be needed for repairs and maintenance
It’s amazing how much money a homeowner can go through on just repairs and maintenance after purchasing a North Scottsdale home for sale. In fact, homeowners spend up to four-percent of their homes’ value on repair and maintenance every year. That number could go even higher if you have to replace a faulty heating system or air conditioner.
Pad your emergency savings so you’ll have funds to tap into just in case a huge repair pops up. You should aim to save six months’ worth of expenses or more.
Expect your property taxes to go up
Whatever your property taxes are when you move into your North Scottsdale home for sale, don’t plan on that number staying consistent. Property taxes tend to go up, even when home values drop. Your home could also be reassessed from time-to-time and that’ll cause your property taxes to go up. Leave some room in your budget to account for this.
Be prepared for big payments
When you buy your North Scottsdale home for sale, you can roll your homeowners’ insurance and property taxes into your mortgage payments via an escrow. While many lenders will charge a set amount to put that excess money in an escrow account to pay your property taxes and homeowner’s insurance, not all mortgages work this way. Many will have you make your exact loan payment resulting in you being responsible for homeowners’ insurance and property taxes. If that’s the case, you’ll need to budget accordingly. For example, if your property taxes are $4,000 a year, you’ll need to write an extra $1,000 check every three months. The average homeowner’s insurance premium in the U.S. is just over $950 so you’ll need to budget for that too.
Homeownership can be rewarding and enjoyable as long as you save the needed amount of money for unforeseen expenses.