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The Costs of Home Ownership

Now that you’ve navigated the plethora of inspections and the closing – congratulations you are a homeowner!  Being a homeowner is quite exciting but also comes with a few additional expenses to consider moving forward.

Property Taxes

Depending on where you happen to live in Texas and what tax bases are included in the calculation of your property tax percentage, this could be a relatively minor figure or large one.  Most homeowners pay their property taxes each month within their mortgage payment.  The mortgage company or service provider keeps those funds in escrow and pays the amount due to the proper taxing authority at the end of each year.  You will want to consult with your realtor or the title company about how the current exemptions will change the annual tax payment moving forward in the following year or even current year in which you take ownership.  While a current homestead exemption of the previous owner will stay in tact throughout the current calendar year, exemptions such as those for seniors, veterans and those with disabilities are portable – meaning the previous owner can remove them from their previous property and move them to a new property they may have just purchased.  If you’ve purchased for an investment purpose and you purchased from a homeowner, anticipate an increase in the funds you’ll pay for property taxes the following year as the homestead exemption will be removed.

Homeowners and Flood Insurance

All lenders will require you to obtain and maintain homeowners insurance throughout the duration of the mortgage span.  Even if you do not have a mortgage, it is wise to have an insurance policy on your home in the event of a loss like fire, wind, theft, etc.  If you do have a mortgage on your property and you decide to cancel or let your current policy lapse the mortgage company will be notified to place home insurance on their asset and it will be expensive.  If you are in a flood plain, you’ll be required by the lender to purchase and maintain flood insurance.  Even those who aren’t in an actual flood plain can still obtain flood insurance for peace of mind – especially those who may live near large bodies of water like lakes, rivers, streams that could have the potential to flood into your home.  Keep in mind flood insurance coverage for properties not actively in a flood plain is very reasonable and worth the expense in order to limit stress.

Homeowners Association Dues

Homeowners Association Dues are paid either monthly, quarterly or annually – generally outside your mortgage payment.  These funds help maintain your community outside your property line.  If you are purchasing in a large master planned community or even a condo community – inquire about any special assessments that are looming. Special assessments or increases would be mandatory if a super majority of all association members vote in favor of the increase.  These are more common for condo communities to offset the cost of increased building and/or pool maintenance.

Ongoing Maintenance

Even if you’ve just purchased a brand new home, there will be ongoing maintenance.  Your HVAC should be tuned up at least twice a year [spring and fall], HVAC air filter should be replaced at least monthly, your water heater should be flushed annually if you have a tank water heater or serviced every 18 months if you have a tankless water heater, your gutters should be cleaned as needed, trees trimmed back from the roofline as needed, dying trees removed with the approval of the city if it is necessary, fencing should be replaced if begins to lean or sway, pest control may be ongoing maintenance to consider to keep rodents and pests out of your home and your roof will eventually need patched or replaced with time.  These are items that most homeowners tackle within the first few months or years of buying a home.  As time passes, an appliance may be in need of repaired or even need to be replaced, as time when your home settles sheetrock will move when you foundation moves because of the expanding and contracting soil underneath your home.  Every now and then those sheetrock cracks will need to be replaced and maintaining exterior paint to prevent wood rot are all items to consider when thinking of ongoing maintenance.