You saved for the down payment. You locked in your mortgage rate. But the real cost of owning a home? That comes later. From soaring insurance premiums to surprise repairs, homeowners today face a growing list of hidden expenses — many of which can throw off your budget if you’re not ready for them.
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That’s because most people focus on the upfront costs, like the mortgage and closing fees, without realizing how much ongoing maintenance and surprise bills can add up. Think insurance hikes, utility spikes, homeowners association (HOA) fees and all the not-so-optional fixes that come with owning a home.
Finance expert Jamila Souffrant, the author of “Your Journey To Financial Freedom: A Step-by-Step Guide to Achieving Wealth and Happiness” and the host of the “Journey To Launch” podcast, breaks down the biggest hidden costs homeowners face today — and how to prepare for them. As part of GOBankingRates’ Top 100 Money Experts series, she answers Question #15: What are the new hidden costs of homeownership?
1. Soaring Insurance Premiums
One of the biggest surprises for new homeowners is just how many little things add up, Souffrant said. “It’s not just the mortgage. You’ve got property taxes, insurance, and then things like maintenance, landscaping, pest control and repairs that somehow always pop up at the worst time.”
Insurance premiums in particular have jumped — and Souffrant notes the increases are especially steep in areas prone to climate-related disasters.
2. Utility Bill Shock
There are even more obvious costs that people forget to factor in, such as higher utility bills than they had while renting. You might have more space to heat or cool, or maybe you’re covering your utilities for the first time, but either way, it’s not something you predicted.
3. Unexpected One-Time Costs
Souffrant pointed out many items that only become obviously necessary once you’ve moved into your new home.
“The one-time purchases — curtains, furniture, tools, maybe even a lawnmower — that sneak up on you,” she said. “Homeownership comes with a lot of expenses that aren’t obvious until you’re already in it.”
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4. Inflation Is Driving up Costs
While homeownership has always been, on average, more expensive than renting, Souffrant pointed out that “everything is just more expensive now.”
This is largely due to the way inflation has driven up the price of materials and labor. As a result, “things like home repairs or renovations cost significantly more than they did a few years ago.”
5. Maintenance and Repairs (Plus Planning Ahead)
To plan for maintenance and unexpected repairs, Souffrant says it’s important to “build a buffer” — or better yet, create a dedicated line item in your budget labeled “home maintenance” and treat it like a non-negotiable monthly expense.
“Even setting aside a small amount monthly adds up and can cushion you when unexpected expenses hit,” she said.
6. Planning Ahead for Future Costs
Equally important, according to Souffrant: go into the purchase with cash reserves. “Don’t spend every dollar you’re approved for on the home itself,” she advised. “Leave room in your budget for ongoing costs so you’re not house-rich and cash-poor.”
She also recommends using your home inspection to forecast future expenses. Most homebuyers are required to get a home inspection before closing, which provides an opportunity to plan for future expenses.
“Use that inspection to forecast the next one to three years,” Souffrant said. “Estimate what repairs or upgrades might be coming so you can plan ahead.”
Homeownership can offer stability and is a powerful way to build wealth — but only if you’re financially prepared for the full picture, Souffrant emphasized.
Get ahead of surprise costs so you can truly enjoy your new home and use it to build a strong financial future.
This article is part of GOBankingRates’ Top 100 Money Experts series, where we spotlight expert answers to the biggest financial questions Americans are asking. Have a question of your own? Share it on our hub — and you’ll be entered for a chance to win $500.
This article originally appeared on GOBankingRates.com: 6 Hidden Costs of Homeownership That Can Wreck Your Budget
