Buying A Home
AlexandScott2015
member
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
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Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Buy Vs. Rent Expenses
We are considering buying a home, I'm curious what monthly expenses surprised you when you bought your first home?
So far I've gathered that if we buy a home we will have to add the following to our monthly budget:
Property Tax
Home owner's insurance
lawn care
emergency fund
Mrs. V
Re: Buy Vs. Rent Expenses
Like the poster above said, I wouldn't worry too much about the property tax/insurance. Those will be rolled into your mortgage payment. However, do be aware, most banks when quoting monthly payments on your mortgage do not include the escrow (this is what pays your insurance/taxes). So before deciding if you can afford the house, make sure you figure out the total monthly cost (principal + interest + escrow). In terms of comparing this to renting, you were still technically paying it, it just wasn't broken down for you by whomever you were renting from.
Lawn care is as expensive as you want to make it. You could hire a service, but in my opinion, you're paying them to do what you can do relatively easily. A few basic yard tools are a one time expense.
The emergency fund is the big one to me. Think about all the things you call your landlord to fix. Those are now your problem. Some can be headed off with preventative maintenance. Others will hit like a ton of bricks. We're reasonably handy, so most things we handle with a quick trip to the local home improvement store and it just comes out of our regular cash flow. But if you're not handy, you'll be calling someone each time which adds to the expense.
Mrs. V
I would say you could try asking the sellers what their bills are, but that varies so much based on their usage patterns, temperature comfort, etc. The former renters where we now own were paying $300-400 electric bills. We're paying about $150 or lower depending on the season.
The other PPs are right on. But for true monthly expenses, mine actually went down a lot. My mortgage payment, which included insurances/property taxes, was $350 less than my previous rent. I'd previously been renting a house that was about the same size as the one I bought. I figured all the utilities would stay the same, but the electricity bill actually went down by about 20% because my home was so much easier and more efficient to cool/heat.
But I initially spent a chunk of money buying a lot more tools and a lawnmower, and that kind of thing. Before, I'd only had a small very basic toolbox. I also had to buy all my appliances. Ugh! Another huge chunk of change...and that was even with buying my fridge and washer/dryer used.
I also started stressing about getting a good-sized e-fund...and fast! I had no savings after closing and prayed nothing went wrong. Not the best way to do that, lol. But I got lucky and there was no catastrophe. The house did need a lot of work, most of it could be done over time. I spent the next two years putting roughly half my extra money toward repairs/improvements and half into an e-fund. It would have been a shorter time than that, but I was laid off a few months after I bought the house.
Haha, come to think of it, getting laid off was a catastrophe. But I could still pay all my basic bills, it just put off the repairs.
Mrs. V
Also, about property taxes...they typically go up especially if you're in a place with good schools. In our first neighborhood, there were other young families. The property taxes increased and we all ended up having to pay $80 more to our mortgage payments. For some families we knew, they could barely make it work. Their budgets were that tight.
Just be mindful of things like this. And pay attention to the property taxes in whatever cities you're looking. They can vary wildly. For example, ours here are $3,500 per year. My parents who live 20 minutes from us pay $4,500.
Good call! Where I live in NOLA, we have huge problems with termites. My initial treatment...for a house that didn't have termites, just to get the service started...was $1800. Then it is another $235/year to get another spray and stay in their program.
Where I live, most banks require a clean termite inspection to underwrite a home loan.
Mrs. V