The True Costs of Home Ownership

Contemplating buying your first home?

You may have saved enough for a down payment and calculated what your monthly mortgage payment can be, but make sure you are aware of the true costs involved in home ownership. Beyond your mortgage payment, there is:

Homeowner's insurance

Most lenders will require you to show proof of homeowner's insurance before they will give you a mortgage. Homeowner's insurance is based on the value of your home. Contact your insurance agent or carrier to get a quote.

Title insurance

This additional insurance policy may be required by your lender, but is a good idea for you nevertheless. Title insurance compensates the homeowner for loss from a defective title or liens against the property that you were not aware of when you purchased the home.

Property taxes

These are also calculated based on the value of your home. In addition to state taxes, you may have to pay county and city taxes as well, depending on where you live.


If you've been living in an apartment up until now, your utility bills reflect the fact that you are heating and cooling a relatively small area. Not only will your square footage be increasing as you move to a bigger space, so will your gas and electric bills. In addition, you may be responsible for utilities that you have not had to pay for up until now, such as water and sewer. 


Most large appliances will usually come with a home, but you may have to buy your own washer and dryer. If you are having the house built new, find out whether the price includes kitchen appliances.

Homeowner's Association Fees

Some communities or subdivisions have property associations. These associations require all homeowners in that community to abide by certain by-laws and to pay dues or fees to cover the upkeep of common areas, such as the swimming pool, tennis courts, or entrance to the community. So be sure to ask your real estate agent about this before you agree to purchase a home. 


If you are moving from a one-bedroom apartment to a three bedroom home, then you have at least two new rooms to furnish. You can save a lot of money if you are willing to buy second-hand furniture.

Repairs and Maintenance

An advantage of renting is that your landlord will typically pay for repairs and maintenance. As a homeowner that burden falls on you. You're now responsible for fixing leaky faucets, cleaning out the gutters, repairing the roof, fixing or replacing the furnace, giving the place a new coat of paint, repairing cracks in the driveway, and removing dead or hazardous trees from your property.

Yard Care

You are also now responsible for the upkeep of your yard. That means you may need to buy a lawn mower, leaf blower, rake and gardening tools. (Of course, you can also pay for a lawn service if you cannot or do not wish to do this work yourself, but that is a more expensive option.)

Pest Control

If ants, roaches, termites or other pests invade your home you will have to shell out the bucks for an exterminator.