Besides the Mortgage Payment, What Else Do I Need to Budget For?
Owning a home can involve property taxes, insurance, utilities, maintenance, repairs and other expenses beyond the mortgage principal and interest.
The mortgage payment is not the only cost to consider when deciding what home fits your budget.
Depending on the home and loan, housing costs may include property taxes, homeowners insurance, mortgage insurance, homeowners association fees and utilities.
Homeowners should also plan for maintenance, repairs and other expenses that may not arrive as a predictable monthly bill.
Property taxes and homeowners insurance
Property taxes and homeowners insurance can add substantially to the cost of owning a home. Depending on the mortgage, these expenses may be collected through an escrow account as part of the monthly payment.
Both costs can change over time, so buyers should not assume today's amount will remain unchanged for the entire time they own the home.
Mortgage insurance
Some mortgages may include mortgage insurance or a similar mortgage-related insurance charge depending on the loan program, down payment and other factors.
If it applies, buyers should understand how much it costs and whether it is paid monthly, upfront or in another form.
HOA and community fees
Some homes, condominiums and communities have homeowners association or other recurring fees.
Those charges can affect the real monthly cost of a home even though they may not be part of the mortgage payment itself.
Utilities
Electricity, gas, water, sewer, trash, internet and other utilities should be part of the household budget.
Moving into a larger home or a different area can also make previous utility bills a poor estimate of future expenses.
Maintenance and repairs
Homeowners may be responsible for repairs and maintenance that a landlord would normally handle for a renter.
Appliances, plumbing, heating and cooling systems, roofs and other parts of a home can require money unexpectedly, which is why leaving room in the budget can matter.
Your other monthly expenses still exist
Car payments, groceries, childcare, transportation, credit cards, student loans, savings goals and everyday spending do not disappear when you buy a home.
A housing payment that meets lending requirements may still feel uncomfortable if it leaves too little room for the rest of your financial life.
Look at the whole housing budget
Instead of asking only whether you can make the mortgage payment, consider the total cost of living in and maintaining the home.
That broader view can help you compare homes and price ranges based on what fits your actual life rather than one payment number.
Where does Buyer Checkpoint fit?
HoopCasters Buyer Checkpoint helps organize several parts of your current homebuying situation and gives you an informational starting point for deciding what questions to ask next.
Buyer Checkpoint does not verify financial information, calculate every ownership expense, determine mortgage qualification or replace a lender's approval or underwriting process.
Look at More Than the Mortgage Payment
Use the free Buyer Checkpoint to organize your homebuying starting point and identify questions to discuss with a mortgage professional.
Buyer Checkpoint is informational and does not determine mortgage qualification, approval, preapproval or loan eligibility.