Good question, with lots of answers. The fact is that—aside from the price of a home—owning a home comes with a number of responsibilities and choices, all of which have price tags associated with them.
Most people know the about the obvious costs: the cost of purchasing the home and the cost of financing the mortgage (if you have to use a mortgage to buy a home). The cost of purchasing the home includes your down payment and your monthly principal payments. The cost of financing includes any upfront fees your lender charges when you buy the home, plus the interest payments you make over the life of the mortgage.
In addition to principal and interest, most monthly mortgage payments include escrow payments for one or more of the following items:
All of these are additional costs of home ownership.
But there are more:
- Utilities, including electricity, water, sewer, natural gas, garbage collection, telephone, cable television, and security system monitoring.
- Maintenance, repairs, and replacements. This is a big category that includes small things (lawn mowing) and big things (air conditioning maintenance). Plus, in the time you own a house, you may replace many things, both big and small. A new faucet for your kitchen sink might cost $100, while a new roof might cost $10,000. Everything else is in between: carpet, appliances, the water heater, and more. The more time and money you spend on maintaining these things and repairing them as needed, the less money you will spend on replacing them. In the nine years that I’ve owned my current house, here’s a sample—not by any means the complete list—of repairs and replacements we made:
- Full kitchen remodel, including flooring, cabinets, counters, and appliances – $19,974.12
- New gutters and downspouts – $1,120
- New windows – $5,894.94
- New fence – $6,995.24
- New gas line – $1,850
- Air conditioning maintenance and repairs – $1,885
- Miscellaneous plumbing – $3,588.21
- We’ve also paid to have our fireplace chimney cleaned occasionally; our lawn mowed; the insurance deductible associated with replacing our roof; occasional pest control services; and much more.
- Decorating. This includes truly discretionary items like paint, window treatments, artwork, and furnishings.
