The average costs of owning a home

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Regular and ongoing expenses related to owning a home

When it comes to maintaining a home, it’s not enough to make your mortgage payments. Many costs that we may not be concerned about are still essential to everyday life and the longevity of your home. Let’s explore some of these essential and ongoing costs of homeownership.

Utilities

Average annual utility costs: $4,158

Source: rocket houses®

Seasoned renters are already used to the cost of utilities like gas, electricity and water. They must be prepared to pay a larger utility bill when they become owners. Owning a home can come with more amenities and square footage, which can lead to higher utility bills

Since the cost of utilities varies by location, we recommend doing your research. Understand each of the different utilities required for a single family home in your area and be sure to transfer all accounts to your name. Missing a utility payment will cost you penalties, so try to avoid this mistake by knowing who you need to pay and when.

Housekeeping and cleaning

Average annual housekeeping and supply costs: $837

Source: rocket houses®

To keep you and your family healthy, a clean home is more of a necessity than a preference. Keeping pests away, eliminating bacteria, and getting rid of dust all require some kind of budget. Whether you want to hire a cleaning service or buy your own supplies and do the work, plan for those costs before you jump into home ownership.

Homeowners Association Fee (HOA)

Typical monthly HOA fees: $200 to $300 per month

Source: rocket houses®

If you’re looking to put down roots in a community with a homeowner’s association (HOA) or condo association, don’t be surprised at the monthly fees you’ll have to pay. The HOA fee is a price each resident must pay to be part of this community. These funds are usually pooled and reinjected into the community. Common areas, such as recreation areas or a swimming pool, landscaping, and maintenance of driveways or roads are some examples of the use of HOA fees.

HOA fees, like most aspects of home ownership, vary depending on where you are located and the maintenance involved in that particular community. For example, a single-family home in a suburban neighborhood will incur lower HOA fees than, say, a luxury condo in a popular metropolitan area. Many neighborhoods have no HOA at all.

Private Mortgage Insurance (PMI)

Annual Private Mortgage Insurance (PMI): 0.5% – 1% of loan amount

Source: rocket houses®

As mentioned earlier, borrowers who make a down payment of less than 20% on a conventional loan are generally required to obtain private mortgage insurance (PMI). The PMI is a monthly premium of 0.5% to 1% of the loan amount each year. For a loan of $300,000, the PMI can be $150 to $300 per year or $12.50 to $25 per month.

With conventional loans, once you reach 20% of the equity in your home, you will be allowed to cancel the PMI. FHA loans, however, use a slightly different type of mortgage insurance. The difference? Borrowers who pay less than 10% with an FHA loan will be locked in with mortgage insurance for the remainder of their loan. Additionally, FHA loans require the borrower to pay an upfront fee for mortgage insurance, typically 1.75% of the total loan amount.

Pest Control Subscription

Average costs for a single visit for pest control: $250 to $600

Average monthly pest control costs: $1,510 to $300 up front, $45 to $75 per month

Source: Forbes Advisor

Life happens, and sometimes that means dealing with bedbugs, mice, or other unexpected visitors. When it comes to protecting your home from these infestations or eliminating these pests from your home, it’s best to leave things to the experts.

Costs vary depending on many factors, but it’s wise to have a few hundred dollars to a few thousand dollars in reserve for this type of emergency.

Internet, telephone, cable and streaming service

Average monthly cable and internet costs: $116 per month

Source: US Cable and Internet Market Size and Household Spending Report 2021

Let’s face it: today it is almost impossible to live without the ability to communicate effectively. Factor the costs of your ISP, streaming services, phone plan, and cable into your home buying budget.

While you may not need all of the above, chances are you do need reliable internet access. Be sure to shop around for bundles or deals in your area.

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