Are you tired of living in a cramped apartment? Do you wish you could call your own place home? If so, congratulations, you’re a soon-to-be homeowner!
Before you jump into the home buying process, it’s important that you’re aware of how much money you’ll spend on a new home each month. It’s far too easy to spend more than you can afford when you get in over your head.
Don’t let this happen to you!
Keep reading for everything you need to know about the average home costs per month.
Mortgage Payments
As a new homeowner, you may be wondering what the average mortgage payments are per month. The answer will vary depending on many factors. These include the type of loan you have, the interest rate, and the term of the loan.
In general, you can expect to pay around $1,000 per month on a 30-year loan with a fixed interest rate. And, if you have a fixed-rate mortgage, your monthly payment is fixed as well for the entire span of the loan. Of course, your exact payments will be determined by your lender and the specifics of your loan.
Home Insurance
The average home insurance policy costs about $100 per month. This includes coverage for your dwelling, personal property, liability, and medical payments.
You may also need to add extra coverage for things like floods or earthquakes. Speak with your insurance agent to determine the best coverage for your needs and budget.
It is important to shop around and compare rates before selecting a policy. There can be a significant difference in costs between different insurers.
Maintenance and Repairs
Maintenance and repairs are one of the biggest financial responsibilities of homeownership. Depending on the age and condition of your home, you can expect to spend 1-4% of your home’s value on annual maintenance and repairs.
For example, if your home is worth $300,000, you can expect to spend $3,000-$12,000 per year on maintenance and repairs.
Of course, some years will be higher or lower than others. For example, you may need to replace your roof every 20 to 30 years, which could cost $5,000 or more.
Utilities
As a new homeowner, one of the questions you may have is what are the average homeowning costs per month? One of the biggest expenses you’ll have is utility costs. This can include electricity, gas, water, sewer, and trash.
The amount you’ll pay will vary depending on the size of your home and where you live. In general, you can expect to pay around $100 per month for utilities.
Gasoline and propane costs are extra and can range from $50 to $100 per month. Internet, cable, and phone service can add another $100 or more to your monthly expenses.
Property Taxes
If you’re buying a home at auction, your property taxes may vary. The amount you pay will depend on the value of your home and the tax rate in your area.
You can expect to pay around 1-2% of your home’s value in taxes each year. The average homeowner in the United States pays $2,085 in property taxes each year.
Home Costs Every Homeowner Should Prepare For
If you’re thinking of becoming a homeowner, it’s important to understand the average monthly costs you’ll face. For most people, home costs will be their largest monthly expense. So before you start shopping for your dream home, make sure you have a realistic budget in mind.
Check out the rest of our blog for more tips to cut costs and make the most out of homeownership!
