1st Year in Your Home? Here's What It Costs

I found a small survey and report on Realtor.com about the surprise costs first-time home owners encounter. The survey said that half of all first-time buyers were surprised at how expensive it was, even though 88% of them claimed to have done a good estimate on costs before buying.   The study for BBVA Compass, a lender based in Alabama, concluded that most lenders don’t warn buyers that there will be costs beyond principal, interest, taxes, and insurance. Among those costs are utilities. The U.S. Department of Energy reported that the typical family spends $1,900 a year – $158 per month – on things like heat, air conditioning and power. The National Association of Home Builders calculated that the typical buyer of a new home spends about $8,640 within the first 12 months for furnishings, appliances, and home repairs and fix-ups, while the typical buyer of a resale home spends $6,540. What's the main lesson to be learned? Have a lot of extra $ in the bank. This usually means saving up for your down payment (a minimum of 3.5% if you are doing FHA financing), plus closing costs if the seller isn't paying for all of them, plus several months of mortgage payments, plus a reserve for unexpected repairs.

Source: United Feature Syndicate, Lew Sichelman (06/06/2010)