According to an August 21st press release from Zillow, homeowners in the U.S. are faced with more than $9,000 in hidden home costs annually. Although these costs are all home-related, they are often overlooked by homebuyers, especially for first-time homebuyers. It’s helpful, therefore, to work with a mortgage broker who will help you consider all these costs, when preparing for the financial obligation of purchasing a home.
Source of Hidden Costs
The costs of homeownership can be broken down into two categories:
- Necessary costs.
- Maintenance costs.
Every home has annual ownership costs that include property taxes, homeowner’s insurance, and costs associated with living in the home.
Property taxes can be estimated accurately before you purchase the house, and you should always consider them in the cost of buying.
Homeowner’s insurance quotes vary depending on the location. Before making an offer on a home, therefore, it’s a good idea to talk to an insurance agent to estimate the cost of insuring the home.
Monthly utility and other bills can be estimated using online tools like MyUtilityScore.com. Remember that utilities should include water, gas (when applicable), electric, garbage collection, HOA fees (when applicable), and any phone, internet, or TV packages you’ll likely purchase.
Homes are likely to require routine maintenance. While cleaning and lawn care are activities you may or may not include in this list, other maintenance tasks are commonly delegated to a professional, including gutter cleaning, HVAC repairs/maintenance, pressure washing, carpet cleaning, and pest control.
Hidden Annual Costs of Homeownership
Even though home ownership costs are known, the costs are considered hidden because they may not be something you consider when shopping for a home. Because, they are not directly tied to the home purchase in closing costs or immediate home repairs.
Related: What Type of Closing Costs Should You Expect to See When Buying or Refinancing a Home?
Zillow found that the average annual cost of homeowners in the United States is $9,394. Depending on where the home is located, average annual costs can change drastically. Average home values have a large impact on annual costs, as well as labor costs for home maintenance. Larger metropolitan areas tend to have higher annual costs, while certain U.S. states have much lower annual costs. Annual costs did not always increase with average home prices.
Miami and Philadelphia are two examples of higher cost areas. Miami’s average annual home costs were listed at $10,173, while Philadelphia’s annuals average costs were $10,205.
Tampa, Pittsburgh, and Orlando are on the other end of the cost spectrum. Their average annual costs were $8,305, $8,472, and $8,523 respectively. Necessary expenses were lower across the board for these areas, but maintenance costs were also significantly lower as well.
Reviewing Hidden Costs Before Closing
The best mortgage brokers will help you think about the overall cost of buying a home, and not just talk about your debt-to-income ratio.
Companies like Marimark Mortgage include questions about existing and anticipated bills as part of the financial consultation before receiving a mortgage. The process includes creating a realistic budget of current spending compared to the total cost of owning a specific home.
Homeownership comes with more cost than just a monthly mortgage payment. With the average home costing more than $9,000 annually in hidden costs, it’s wise for buyers to look at the total cost before making a purchase.
Marimark Mortgage is based in Tampa, Florida and serves the mortgage needs of homebuyers, homeowners, and investors in Florida, Virginia, and Pennsylvania.
We specialize in conventional home mortgages, FHA, VA, and USDA mortgage options, refinance loans, and reverse mortgages. We’ve worked extensively with cash-out refinancing and help clients to lower their monthly mortgage payments.
To get started with a mortgage to buy your next home, please fill out our Quick Mortgage Application, or contact us direct.