How Much Does it Really Cost to Own A Home?

Even now, we still see ads that you can own a home for the same amount of money you pay in rent. Well, since nobody who writes these ads knows exactly how much you pay for rent, or what you would pay for the home you want to purchase, it is important to examine this claim. Is owning a home really as cheap as renting?

They usually compare your mortgage to your rent payment. For instance, I have seen ads that claim your monthly payment will only be $750 a month, and now you might be paying $1,000 a month to rent a larger apartment or small home in an average area. But is that $750 monthly mortgage payment all you need?

Here are some of the basic costs of home ownership:

Homeowners Insurance – This will, of course, vary by many factors. Your area, size and value of your home, etc., will determine your actual rates. Of course, the actual insurer will set your premium based upon its underwriting and the type and amount of coverage you have. But let us just say your homeowners insurance will cost about $100 a month. This is probably a conservative estimate. You can compare homeowners insurance rates here. Note that many landlords do require renters contents insurance too, but it is usually pretty cheap. You can also compare homeowners and renters insurance.

Property Taxes – When you rent, your landlord pays property taxes, though that amount may be go into how he or she calculates your monthy payments. Now you must pay school taxes, county taxes, water district taxes, etc. This amount will vary, but let us just estimate your year end tax bill will mean you need to set aside another $200 a month.

Homeowners Association Dues – These dues help keep up neighborhood services, like landscaping common areas, parks, and swimming pools. These also vary by neighborhood, and some are quite low. Some are substantial though. Let us pull some average figure for a newer neighborhood and estimate these fees will be about $600 a year. This means you need to set aside another $50 a month.

Repairs and Upkeep – If you purchase a new home, you may have a warranty. You may also be able to buy a warranty on an older home. If you do not have a warranty, you will need to pay for repairs. If your sewer backs up, air conditioner goes out, or you need to fix the fence, these will come out of your budget now. I think any sensible homeowners would allocate, at least, $100 a month for repairs and upkeep.

Is Owning Really Cheaper? Well, you can see by our illustration that the homeowners would have higher costs than a renter. If you are purchasing a home because you think it will ease the load on your monthly budget, you may want to really sit down and examine that logic.  You also really need to be sure your family is in a stable financial position. It is much easier to get out of a lease, if you have to move, than it is to get out of a mortgage!

Advantages of Home Ownership – Do not get the idea that we do not want anybody to buy their own house. You can enjoy a lot of advantages when you own, instead of rent. You should enjoy the pride and security of owing a family home. You may also be able to build a large asset that will help provide financial security. A home may also provide some tax advantages that renters cannot take.  It doesn’t always work out that way, but it does for many families.

Related posts:

1. Buy Home Insurance Right
2. Home Auto Discounts Are Often The Best Choice for Cheaper Home Insurance
3. Finding Affordable Home Insurance From Top Insurers

In order to buy affordable home insurance that offers top quality coverage you need to understand some of the basics. For instance, do can you tell the difference between homeowners and contents insurance? Do you need to cover a property, building, and the things inside, just the building, or just the content?

Look at Common Types of Homeowners Insurance:

• Homeowners Insurance: If you bought the home you live in, you probably need to cover the building, property, and also your belongings. You also need some liability insurance in case somebody is injured inside your home. In addition, you may want relocation assistance in case you need to rent a hotel room or apartment while your house is being rebuilt.
• Renters Insurance: If you just rent a house or apartment, you probably just need to protect the contents of your home, and perhaps have some relocation assistance.
• Landlord Insurance: If you own a home that you rent out, you would usually only cover the building and property, though you may have your tenants buy renters insurance as a part of their lease.
• Condo Insurance: Even though people own condos, their building is usually covered by a policy that the building association covers. The condo owners would want to cover their belonging, so this is similar to renters insurance.

Let us help you fnd the best homeowners insurance quotes with our fast, safe, and free online forms!

Related posts:

1. Real Costs of Home Ownership
2. Finding Affordable Home Insurance From Top Insurers
3. Condo Insurance Policies vs. Homeowners Insurance