For many people, homeownership is the ultimate dream. No landlord, no restrictions on interior design, and the security of knowing you own the place that you call home. But, how to make that dream a reality? 

You know you’ll need some significant savings to get an offer accepted. But there is more than just a down payment and a mortgage to consider. There are many monthly costs of living in your own home that must be budgeted for ahead of time, to ensure that you really can afford to live in your own home.

Read on for 5 costs of homeownership and how to budget for them.

1. Property Taxes

You probably know that you’ll need to pay property taxes on your new home. What many people find surprising is just how big of a payment this could be. When a home is listed for sale, the previous year’s taxes are included in the listing information. Property taxes get factored in to your monthly mortgage payment, so make sure you don’t neglect this!

2. Energy Bills

It’s no surprise that the more space you have, the more it costs to heat and cool. The difficulty is determining just how much it will cost, as it varies depending on your plan and energy usage needs. Try contacting local utility companies to discuss rates and calculate your probable monthly energy and heating costs.

3. Homeowner’s Insurance

Like the other items on this list, the cost of homeowner’s insurance varies. It depends on the age of your home, where it is located, the materials used to build it, and other factors. The best way to determine this cost is to speak directly to your insurer.

4. Maintenance and Repair Costs

It may seem unnecessary to add repair costs to a monthly budget. After all, you hope that you won’t be needing repairs each and every month. But if you set aside a bit each month, you won’t be caught off guard when costs inevitably do come up. Aim on putting away 1%-3% of your home’s value every year for regular maintenance and repairs. 

5. HOA Dues

If your new home is in a complex, there is most likely a Homeowner’s Association which will have monthly dues to pay for things like common area maintenance. This will probably be one of the lower monthly costs of homeownership, but it’s still important to keep in mind when making your budget.

Even if homeownership is a future goal, you can start preparing yourself now by creating and living by a monthly homeownership budget. Set aside the money that you will eventually be spending on the costs of owning a home and put it towards a down payment for when the time comes for you to purchase a home. 

Do you have any homeownership budgeting questions?