Beyond making your monthly mortgage payments, have you considered the additional costs of owning a home?
If you have a mortgage, your property taxes will be included in your monthly payment. But, if you’ve paid cash (or paid off your home) you’ll be responsible for paying the annual property taxes. In New Orleans, property taxes are paid in advance, so the bill you receive in 2015 will be payment for the 2016 taxes.
Flood and home owner insurance
Just like property taxes, if you have a mortgage, your insurance premiums will be paid through your escrow account. The annual premiums, divided by 12, will be added to your monthly house payment until the mortgage is paid. If you’ve paid cash, don’t forget to budget for the annual bill when it comes due each year.
Hate the wallpaper? Want wood floors instead of carpet? Improving your home is an excellent way to add equity, but some projects, like full kitchen and bathroom remodels, can be quite costly.
Maintenance and repairs
Remember when you would just call the landlord because the sink backed up or the dishwasher was leaking? You’re the landlord now, so make sure you have a cushion for unexpected repair expenses.