The major cost of owning a new Prescott home consists of your down payment and monthly mortgage. However, you also have to budget for additional expenses, something you may not be aware of if this is your first house. The following lists the major financial obligations you acquire when you own real estate.
- Homeowner Association Dues. Due every month, the HOA covers maintenance for the common items shared by all homeowners in a new development. These can include the community clubhouse and pool, playground, walkways, street lamps, and mailboxes. It can also cover insurance for the exterior of your home, although you’ll still need a policy to take care of the interior structure and your possessions.
- Private Mortgage Insurance. The PMI is based on a percentage of your mortgage value. It
protects the mortgage company’s interest in the home by compensating the company if you default on your payments. Your fee drops off after you own at least 80 percent of the value of your property.
- Property Taxes. You pay this government obligation to take care of essential city services such as roadwork, public schools, and law enforcement. It’s normally due as a lump sum once or twice a year. For easier budgeting, you can request that the amount be divided into 12 monthly payments that are put into an escrow account. The escrow holder then pays the total when due.
- Utilities. You’re already familiar with the electricity, water, gas, trash pickup, Internet, and cable needed to enjoy the interior of any residence. However, some or all of these fees may have been included in your monthly rent. When you buy a home, you need to apply for these services from separate companies and pay them separately on different dates.
If you want to know more about the expenses associated with owning a home, or want help in buying one, please contact us.