People often make the mistake of just looking at the mortgage payment to see if they can afford to buy the home of their dreams. Using a mortgage calculator, if you put 20% down on a $300,000 home at a rate of 4.5%, you could figure roughly about $1,420 per month in payments. They look at the value and determine if they can afford to buy the house and live there. This is probably one of the biggest mistakes a rookie home buyer can make. When owning a home, there are countless of things that accrue in costs that people often neglect or simply don’t consider in their budgets. So consider these things when deciding to save for a house.

Utility Bills


Electric and Gas bills can be very expensive if you’re not careful. If you’ve been living in a small apartment and had roommates, you’re new utility bill for the new house will come as a shocker to you. Typical apartment is about 800 square feet of living space. Compare that to a typical townhome which  is about 1500-2000 square feet of living space. Single family homes are even larger than that. So if you do the math, you can figure out how much more money it will cost just to be comfortable in your new home. To control these high utility bills, you can use a programmable thermostat to control the climate and temperature of your home automatically. Also, you can use space heaters in your bedrooms during the night time so you don’t have to heat up the entire house all night long.

HOA Fees

Homeowners Association Fees vary from community to community. My HOA fee is only $37 every month, but I know a few friends that pay well over $100 every month for the same fee. Also, on top of that, there may be other fees associated with it. For instance, I have to pay a $300 water/sewer assessment fee every year to the county. Other home owners may be required to pay various community fees unrelated to the HOA, which seems utterly ridiculous to me. So before you buy, inquire about these fees that no one may talk about. They can really do some damage to your budget if you don’t pay careful attention. If you are thinking of buying condo, make sure to ask about condo fees, which typically run anywhere from $100-$400 every month, straight out of your pocket, in addition to your monthly mortgage payment.

Property Taxes

Property taxes is another hidden cost killer. They’re typically rolled over to your mortgage payments, tucked and hidden away in your escrow account. Whatever the value of your home is, property taxes can cost you up to an additional 1-2% every year. So, a $300,000 home can cost you an additional $3000-6000 annually. That $1420 mortgage payment all of a sudden ballooned up to around $1700.

Homeowner’s Insurance

Insurance surprisingly is not that expensive and can cost you somewhere around $50-$100 monthly, depending on the value of your home. My house costs about $50 a month to insure and I already took out a $7,000 claim due to flooding of my basement. This fee can also be included in your escrow account, along with your property tax payments, so you won’t probably not even know you’re paying for it. So, now a $1700 monthly mortgage is up to $1750. A $300,000 home doesn’t seem as affordable anymore.

Major Appliance Repairs

When you buy a home, you have to buy major appliances as well. They’re not cheap and they don’t last forever. Refrigerators can cost up to $2,000 and will last you about 10-15 years. Washer and Dryer combo can cost up to $1,500 and will last about 10-12 years. Water heaters cost around $500 and last about 7-10 years. Air conditioners or heat pumps most likely come with the house, but a new one will cost anywhere from $5,000 to $10,000. They last 15-20 years typically. These large appliances are expensive to purchase and they all seem to last about the same length of time. If you have a bad year and two of these appliances need replacing at the same time, it could definitely damage your budget and use all of the savings you’ve accumulated.

Lawn Care

Mowing your lawn is another chore you can not just overlook and forget about. Lawn mowers are expensive and taking care of your lawn can be a headache as well. I think I have the ugliest front lawn in the block. My weeks are relentless and they will not go away. Seeding and reseeding and fertilizers can add up to a big chunk of change. These costs are something home buyers neglect to see when making their purchase.

As you can see, buying a home is no joke. Don’t be mislead into thinking you can afford to buy a home just because the calculated monthly mortgage payments seem reasonable to you. Consider all of these other cost factors as well before making your final decision.