When calculating the costs of buying a home, it's important to think beyond the upfront expenses. You have to have a plan to cover the down payment and closing costs, of course, but you should also know what your prospective monthly mortgage payment will be. After that, you need to think about the “hidden” costs of homeownership. Things like property taxes, homeowners insurance, utilities, and home maintenance will add up. And depending on where you live, they can add up to a lot.
In fact, according to one recent analysis, they can add up to as much as $14,000 a year. Property taxes alone account for a large share of that. In New York, for example, property tax can be as much as $9,000 a year. Naturally, repeat buyers are less likely to be caught off guard by the price of taxes, insurance, and utilities. First-time buyers, though, have to be sure to work them into their buying equation. It'll help produce a more realistic budget and reduce the risk of buying more house than you can afford.
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