Exploring Home Costs Beyond the Mortgage: A Complete Guide

If you’re a first-time home buyer, you may not realize home costs extend beyond the sales price and monthly mortgage payments. Because owning a home is one of the most significant financial investments you can make, you should also make sure you understand all the associated costs you may face as a homeowner.

Homeowners’ insurance, property taxes, and tax deductions are just a few of the items you should have a handle on as you start your home-buying journey.

JPMorgan Chase offers an array of resources and tools to assist home buyers in the process to ensure that one of the biggest financial decisions you make will also be among your most rewarding.

Understanding Home Costs Beyond the Mortgage Payment

Buying a house is exciting, especially for the first time. There are many home costs to consider as you embark on your home-buying journey.

The mortgage payment itself is based on the price of the house minus any money you put in for a down payment and interest, usually split into a 15-year or 30-year term. The monthly payment represents principal and interest (the cost the lender charges for borrowing the money).

But what are the other costs you should factor into your homeownership budget beyond monthly mortgage payments?

Common Monthly Expenses

Homeowners’ Insurance

Mortgage lenders require you to have homeowners’ insurance to protect the interior and exterior structure of your home and your personal belongings in the event of damage. The premium varies based on home value, the value of what you own, the deductible, whether it covers sheds or garages on the property, and liability coverage if someone is injured on the property.

To find the best home insurance cost, plan on getting quotes from more than one insurance company. Many carriers will offer premium discounts if you bundle your home and auto policies with them.

Property Taxes

The city, township, or county where the house is located determines the amount of property taxes you must pay. Property taxes are due in the summer and winter. Many lenders require that the mortgage payment include property taxes and home insurance costs as a monthly escrow amount.

Utilities

Monthly utility bills for heat, air conditioning, electricity, and water are also part of homeownership. Charges reflect monthly usage and utility rates, and monthly fees vary according to the size of the home and usage amounts.

Utility providers often offer energy-saving tips on their website or in your monthly billing statement. Thankfully, you can save on monthly bills by practicing energy-saving techniques (you can find some pretty good ones on the U.S. Department of Energy and Environmental Protection Agency websites).

Homeowners Association (HOA) Fees

If you buy a condominium or a home in a neighborhood with a homeowner’s association, you’ll pay a monthly, quarterly, or annual fee that covers services like trash collection or snow removal.

Variable Maintenance and Repair Expenses

Maintenance and repair expenses are a part of home ownership that vary according to your residence, equipment, appliances, and upkeep preferences. They include the following:

HVAC System, Water Heater, and Sump Pump

To keep your heating, ventilation, and cooling (HVAC) system in good condition, you should pay for regular maintenance in the spring and fall, which includes an annual inspection, tune-up, and filter replacement.

If the heating or AC system has issues or fails, you may also have to pay for repairs. This can include the furnace, air conditioning unit, water heater, and sump pump. If any issues are non-repairable, you’ll have to pay to replace the system, equipment, or unit.

Major Appliances

Major appliances like the stove, refrigerator, dishwasher, clothes washer, and dryer may also fail or need repair or replacement over time. Keep in mind that not all homes include appliances. Check your purchasing agreement to see whether you’ll have to buy them yourself.

Landscaping, Snow Removal, and Yard Equipment

Homes with yards tend to mean landscaping, meaning you’ll need tools for its upkeep. And if yardwork isn’t something you want to handle yourself, you may have to pay a service for tasks like mowing and edging, trimming shrubs, and applying fertilizer. Sprinkler systems also require seasonal upkeep and may increase your water bill.

You may also have to hire a pro for gutter and downspout cleaning or snow removal during the winter.

Additional Home Costs for Optional Home Services

Your lifestyle may also mean a need for services that incur additional expenses, such as:

• Cable TV or streaming subscriptions
• Internet service
• Home security and monitoring equipment

Miscellaneous Home Costs and Repairs

If there’s one thing a longtime homeowner will tell you, it’s that having a house of your own always means unexpected expenses. Some additional costs and repairs you may incur as a homeowner include:

• Roof repair or replacement
• Window and door replacements or upgrades
• Garage door repair or replacement
• Mold removal
• Pest control — including termite removal or prevention
• Unexpected plumbing leaks or repairs
• Electrical system repairs or upgrades
• Concrete driveway, sidewalks, or porch step repairs or replacement
• Deck or patio staining or repair
• Unexpected fire or storm damage
• Room renovations and upgrades

How JPMorgan Chase Can Help You Budget or Prepare to Buy a Home

JPMorgan Chase has several online tools to help you financially prepare before buying a home, including:

• Budgeting tools to track your savings and expenses
• A home affordability calculator to estimate how much home you can afford
• Grants and other benefits to put homeownership within reach

Get in touch with JPMorgan Chase and start your journey to being a homeowner today.