Your mortgage payment is just the beginning
You finally did it! After looking at dozens of homes with our Orlando Realtor, you’ve traded in renting for owning. So what now? If you haven’t found out yet, you may be surprised that there are a lot more expenses involved with owning a home than you thought. The nice thing about renting is that the expense of maintaining a property is the responsibility of the landlord.
Now that you’re the homeowner, these expenses become your responsibility. Homeowner association dues, property taxes, insurance, repairs, and maintenance are now yours forever and ever until death do you part….or until you sell. It’s a good idea to consult with your Orlando Real Estate Agent so that you have an idea of what expenses you will be responsible for.
Here’s a breakdown of expenses you should expect to face as a new homeowner starting from the day you close.
Closing Costs
Although these fees are usually shared by both buyer and seller they can still add up to thousands for each party. Buyers will typically try to include these costs with their loan so they don’t have to come up with the cash at the closing.
Property Tax
There’s no escaping Uncle Sam…property taxes are the main source of income for counties and school districts. In Orange County, FL an average of 0.97% of the property’s assessed value is collected. Property taxes are typically included with the loan payment but may sometimes be paid separately. It’s important to know how much you will pay in property taxes to avoid being sent into shock when you receive a property tax bill you weren’t expecting or prepared for.
Private Mortgage Insurance
If you paid less than 20% of the purchase price as a down payment, you’ll have to buy private mortgage insurance aka PMI. This type of insurance helps homeowners to buy a home with a smaller down payment. It protects the lender in case the new homeowner defaults on the loan. Once there is sufficient equity in the property PMI can be canceled.
Homeowner’s Insurance
Unless you pay cash for a home, there’s no getting around this one…and that’s not all. Here in Florida, we get hit with Hurricanes and floods which means that you’ll need a supplemental policy for damage caused by natural disasters. And… If you have a lot of jewelry and other expensive items you may want additional protection for them as well.
Maintenance and Repairs
This one’s a doozy!… If you bought a home that’s in need of some major repairs then you pretty much knew what you were getting into. But if you buy a newer home thinking that you’ll never have to spend money on maintenance and repairs think again…If your home is relatively new then you probably have a while before having to do any major work to your home. However, sooner or later you’ll be faced with a major repair like replacing a roof or an AC unit that will cost you several thousands of dollars to replace. It’s best to keep a separate bank account for unexpected home repairs so that you don’t get caught with your pants down.
It’s important to keep your home well maintained because chances are that one day you’ll end up selling it and moving on. In order to sell it for the highest price, it will have to be in good condition.
