Home buying is a big step. If you’re looking at homes, you’ve probably carefully budgeted and thought over your options. However, you may not consider all the hidden factors homeowners face.

There is more to figure out than just your mortgage payment. Other things like taxes, insurance, bills and other factors can surprise many. In fact, on average, homeowners spend nearly $5,000 per household each year on hidden costs, according to a recent report from Zillow.

Knowing the costs means you can better plan and be prepared. Check out the most common hidden fees below:

Closing costs
Some home buyers forget about the closing costs when buying a home. However, after your loan has been approved and the home inspection is done, you’ll have a closing meeting to sign the paperwork and pay for some miscellaneous costs. These include mortgage interest payments, taxes and insurance escrow payments, legal fees, lender application fees, title insurance and recording fees for the county clerk.

On average, buyers pay 2-5% of the total cost of their home in closing costs.

Homeowners insurance
Homeowners insurance covers the cost of replacing items in your home if they’re stolen or damaged. The scope can include natural disasters, flooding and water damage, depending on your coverage. The average homeowners insurance policy costs about $1,500 per year, according to the Insurance Information Institute. However, plans can have a range of costs depending on your coverage needs and other specifications. You can shop around for the best homeowners insurance rate or opt to bundle it with other insurance, like your car, which can often result in savings.

Just make sure you’re fully aware of your policy and what is covered. In certain situations, you may want to opt for additional coverage. For example, if you’re in a flood zone, you’ll want to make sure you have (or have additional) flood coverage.

Property taxes
Every homeowner will have to pay taxes. These vary by state, county, city and sometimes even neighborhood. These also vary by your home’s evaluation. In some areas, this evaluation is done every three years. However, in some places, it can be yearly.

You will receive a letter that outlines your home’s assessment and tax rate. You have the option to appeal for a new assessment if you believe your home has been taxed too highly. If you’re looking at potential tax rates, research what other homes nearby are taxed.

Unfortunately, utilities can be as high as taxes. Most often, too, homeowners don’t factor this cost into their budget. Of course, there are many factors in costs, such as home size, geographical location and home specifics. Utilities are usually at least a few hundred dollars but can be higher.

You can do some research online about your area’s average utility costs, or you can chat with a friend who owns a home in the area. Their utility bill will likely be at least similar to what yours could be.

Home maintenance
All homes will have some maintenance costs. These aren’t things that go wrong with your home or unexpected disasters. These are day-to-day or weekly upkeep, like tree trimming, yard care, gutter cleaning, etc. While some of these tasks can be performed by you, some will require hired specialists.

Experts suggest the 1% rule, which means you should plan to pay at least 1% of your home’s value in upkeep costs each year. So, if your home’s purchase price was $300,000, you should expect to pay $3,000/year on upkeep. Just keep in mind this is just an approximation.

Contact us as your mortgage partner when you’re ready to buy your new (or next) home. We can help you navigate these costs and help you get qualified for your dream home. We have over 25 years of experience and our small business means that each of our clients gets the attention they deserve. Visit our website to learn more: https://alliedmg.com/