Homeowners Can Spend Over $9K a Year in Hidden Costs

According the report, the average American spends an additional $9,500 per year on home expenses.

Finding the perfect house, getting a mortgage and moving in are just the start of the expenses you will have to deal with as a brand new homeowner. The actual amount that you will have to pay above and beyond the mortgage payment will vary but a new analysis by Zillow and Thumbtack discovered some shocking numbers.

According the report, the average American spends an additional $9,500 per year on home expenses. The majority of these expenses were made up of property taxes and homeowners insurance, both items that are mandatory when it comes to owning home. Unfortunately, many new homeowners forget to factor in these significant expenses when setting a budget for their new home.

The cost of home maintenance was another area where people tended to underestimate their annual costs. This was especially true if they were moving into a home type that was dramatically different than the one they previously lived in or were moving to a new city or state.

According to experts, homebuyers will often fixate on the monthly mortgage payment or the listing price of the property without properly budgeting for the additional expenses that every homeowner faces. These expenses can quickly add up and put stress on the new homebuyers ability to cover their monthly bills.

One example would be a homebuyer who is excited about the potential of a big backyard or pool but doesn’t research the cost of landscaping, maintaining the yard or the cost associated with owning a pool, which can be significant.

The True Cost of Ownership

The hidden costs varied by city and state but nationally the average worked out to $9,477. In order to come up with these numbers Zillow analyzed their data concerning property taxes and home insurance, while Thumbtack assessed the cost of five common maintenance services that homeowners have to deal with on an annual basis. Examples include yard work and carpet cleaning.

They ran the numbers on 15 large metropolitan statistical areas and Boston was the big winner, or loser depending on how you look at it, with annual hidden costs of $13,930.

Here is how the numbers shook out:

15. Phoenix-Mesa-Glendale, Ariz. – $7,550
14. Atlanta-Sandy Springs-Marietta, Ga. – $8,043 (Review Atlanta Georgia Home Insurance Rates)
13. Denver-Aurora-Broomfield, Colo – $8,146
12. Las Vegas-Paradise, Nev. – $8,789 (Average Las Vegas Nevada Home Insurance Rates)
11. Charlotte-Gastonia-Rock Hill, N.C.-S.C. – $8,865 (Review Charlotte NC Home Insurance Rate Quotes)
10. Minneapolis-St. Paul-Bloomington, Minn.-Wis. – $9,782
9. Orlando-Kissimmee-Sanford, Fla. – $10,100 (Review Orlando Florida Homeowners Insurance Rates)
8. San Diego-Carlsbad-San Marcos, Calif. – $10,647 (Review San Diego, CA Home Insurance Quotes)
7. Portland-Vancouver-Hillsboro, Ore.-Wash. – $10,672
6. Los Angeles-Long Beach-Santa Ana, Calif. – $11,333 (Review Los Angeles, CA Homeowners Insurance Rates)
5. Seattle-Tacoma-Bellevue, Wash. – $11,549
4. Philadelphia/Camden-Wilmington, N.J.-Del.-Md. -$11,953 (Review Philadelphia, PA Home Insurance Rates)
3. Chicago-Naperville-Joliet, Ill.-Ind.-Wis. – $12,236
2. San Francisco-Oakland-Fremont, Calif. – $13,287 (Review San Francisco, CA Home Insurance Rate Quotes)
1. Boston-Cambridge-Newton, Mass.-N.H. – $13,930

Proper Planning is Key

When shopping for a house, setting a budget is just the first step. You must take into account costs such as insurance and taxes. A home listing should clearly show what the annual property taxes are currently being billed at, if not ask your agent to get these numbers.

Homeowners insurance is another major expense that should be budgeted for when shopping for a home. Get a quote for coverage on any house you are seriously considering putting a bid in on. Our home insurance shopping service is free and we are more than happy to provide multiple home insurance quotes for every home you are considering buying. Let us help you with the home buying process.

Shop around for the best interest rate. A good credit score and a significant down payment will ensure that your finance company will offer you a competitive rate. Contact brokers, banks and even credit unions in your search for the best mortgage rate.

Finally, check out the rates of services that you might hire out as a homeowner. Yard work, window cleaning, maintaining a heating and air-conditioning system are just a few expenses you should consider.