What Bills Will You Have to Pay When You Get Your Own Home?

Couple standing in front of a new house.
Image Credit: BananaStock/BananaStock/Getty Images

Owning a home allows you to build net worth and, unlike renting, your monthly payments don't disappear into the ether. However, there's no landlord to fix things or to pay for repairs to a home you own. You should do some calculations that include all the expenses of owning a home before you actually buy one.


Home Mortgage Expenses

Your biggest ongoing expense when you buy a home will almost certainly be your mortgage. Unless you are very fortunate and have enough money to buy a house outright you will probably be paying for it for years to come. Each mortgage payment you make will have a fairly large percentage that goes solely toward interest. You can reduce the total amount you end up paying by making prepayments if you can afford them, thereby accelerating the amortization date of your mortgage.

Home Insurance Expenses

You should have fire insurance for your home, at minimum. For most people, a house is by far the largest investment they ever make. If your house burns down and you don't have insurance, you could be financially ruined. Many people extend their home insurance plans to cover for the potential of flood damage, theft, vandalism and other unlikely but possible events.


Property Tax Expenses

Property taxes paid by homeowners are the primary funding source for municipal governments. As a homeowner your taxes help pay for schools, infrastructure maintenance and public safety. Property taxes are usually based on the municipal assessment of the value of your house, which is based on size, location and the selling prices of similar houses in your neighborhood. Most towns bill for taxes twice a year, meaning you may be required to pay 50 percent of your annual taxes every six months.


Home Utilities Expense

When you own a house you have to pay for any utilities, including electricity, telephone and natural gas. Home utilities can also include cable, Internet, trash pickup, water and sewer charges. Some cities include trash pickup, water and sewerage in their final three in tax levies while others charge separately. Unlike taxes, you can control the amount you pay for utilities to some extent by using less.

Home Maintenance Expenses

All buildings require maintenance but the newer your house is, the less work it should require. Homeowners should always be prepared to put several thousand dollars into their properties every year, though. For example, shingles on home roofs may need replacing, furnaces burn out, and floors become worn down and need refinishing. When done properly, however, preventive home maintenance can save more expensive repair work in the future.


references & resources