Analysts, along with everyone, are wondering what the next few months will hold as the pandemic rages on, causing inflation to stall and mortgage rates to rise, even with fewer jobless claims.
Summary: Home ownership carries many expenses, such as home insurance, PMI, maintenance and so forth. This article identifies new home expenses and gives tips to prepare for these expenses. This article will explain more.
If you’ve recently purchased a new home in Washington State, you may be wondering about what sort of new expenses you will likely incur. Of course, you’re also probably in a good mood, because there’s ample evidence to suggest that owning a home in Washington State can be an excellent investment.
This is particularly true if your new home is located in one of Washington’s larger cities, such as Seattle or Bellevue. Owning a home has the potential to bring a whole host of substantial benefits. But, home ownership also comes with a lot of responsibilities too.
When you buy a home, you no longer have a landlord to whom you can go when you have problems. You are in charge of taking care of all the maintenance, all the taxes, all the appliances, all the repairs, and so forth. In short, home ownership can come with a lot of new expenses, and preparing for these expenses is a big aspect of being a responsible owner.
In this post, we will identify and discuss a few of the new expenses you’re likely to encounter as a new homeowner in Washington State. Then, we will discuss the issue of preparing for new home expenses. We will focus on the following expenses: home insurance, private mortgage insurance (PMI), property taxes, HOA fees, utilities, and home maintenance and repairs. Not every home owner in Washington State will deal with all of these expenses, but most home owners will encounter at least a few.
To recap, we will cover the following:
- Home insurance
- Private mortgage insurance (PMI)
- Property Taxes
- HOA fees
- Home maintenance and repairs
- How to prepare for these new expenses
When you buy a home, you’ll definitely want to obtain home insurance. Home insurance protects you in the event that your home is burglarized, damaged or destroyed. This is one of those expenses which is rarely contemplated by new home owners.
The cost of home insurance will vary according to a variety of factors. In some cases, you may be able to obtain a lower cost if you bundle your home insurance with another type of insurance, such as auto insurance. In any case, you’ll want to prepare for this expense in advance so you aren’t unpleasantly surprised by it.
Private Mortgage Insurance (PMI)
Not every Washington State home owner will need to obtain Private Mortgage Insurance, but those who put down less than 20% will usually be required to do so. As with home insurance, many new home owners do not plan ahead for the additional cost associated with PMI. When you buy your home, you’ll want to prepare for PMI, because this expense can be sizable.
This is another expense which is often neglected by new home owners. Property taxes are a matter of state taxation, typically assessed and imposed at the county level. In most cases, property taxes are imposed on an “ad valorem” basis, which means that the tax is based on the value of your home.
On an annual basis, property taxes can add up to many thousands of dollars, and so it’s imperative that you plan adequately for this expense. If you fail to pay your property taxes, the state can place a lien on your home, something which no home owner wants to deal with.
If you buy a condo in Washington State, you’ll need to pay HOA fees. HOA fees are given to cover various maintenance costs in common areas in a condo community, such as landscaping. HOA fees can vary widely. Everything depends on the particular condo community you choose.
Some condos will carry HOA fees in the range of $1,000 per month, or more, while others will be only several hundred dollars. Again, this fee isn’t often considered when people buy a condo, but it is something which should be accounted for in advance.
Home Maintenance and Repairs
Another expense you’ll need to think about and prepare for is the expense associated with maintenance and repairs. When you buy a home, you’re the one who is responsible for taking care of your place. You’ll need to pay for regular maintenance and upkeep.
If something breaks, you’ll need to pay for the cost of the repair. If your faucet starts to leak, or your appliance breaks down, or your roof becomes faulty, you’ll need to absorb these costs. Make no mistake, maintenance and repairs and eat up thousands and thousands of dollars on an annual basis, and so you’ll need to seriously consider these costs when you buy a home.
How to Prepare for These New Expenses
Preparing for new home expenses isn’t really an arduous task, but it does require some effort on your part. And the first step, before anything else, is that you need to be aware of these expenses. As we’ve mentioned, many new home owners simply aren’t aware of certain or all of these expenses, and so you should take the time to acquaint yourself with all the expenses you’re likely to incur.
On top of educating yourself, you should make the effort to save some funds exclusively for these kinds of home ownership expenses. If it helps, start a new bank account and begin putting a regular amount in that account on a monthly basis.
Begin this process as far in advance of your home purchase as possible. The bottom line is that you’ll want to dedicate a portion of your finances to these expenses, otherwise they can sneak up on you. If you don’t plan for these expenses, mentally and financially, they can add up and make the home ownership experience much less enjoyable than it can be.
Whether you’re buying a home in Tacoma, Bellevue, Seattle, or any other area of Washington State, you’ll want to be as prepared as you can be for the expenses which will inevitably follow.
Get in Touch with Us for More Mortgage Information
If you’re in need of a mortgage, Sammamish Mortgage can help. We have been providing mortgage loans in the Pacific Northwest since 1992. We are a family-owned mortgage company with an excellent track record of providing quality service to our customers. We offer a variety of mortgage programs to borrowers across Washington, Oregon, Idaho, and Colorado. If you’re seeking a home in WA State and you need a mortgage loan, call us today!