When you’re shopping for your first home, the mortgage payment is usually the number you watch most closely. But what will it cost to heat the house in January? Who will clear the driveway? And what happens when the water heater stops working?
You don’t need to predict every expense before you buy. Having a realistic budget, though, can help you choose a home that leaves room for everyday life and a few surprises.
The numbers below are examples, not average New Hampshire costs. Use actual bills and quotes for the home you’re considering.
The numbers below are examples, not actual costs.
Start by asking for the home’s latest full-year property tax bill. Your lender can help you estimate what to budget, keeping in mind that taxes can change.
If the annual bill is $6,000, that works out to $500 a month.
Your lender may already include that amount in your mortgage payment through an escrow account, which holds money until the tax bill is due. Check before adding it to your budget again. Even with a fixed-rate mortgage, your total payment can change if taxes or insurance costs increase.
The numbers below are examples, not actual costs.
Insurance is another expense that may already be included in your mortgage payment. Get a quote for the home you’re considering so you have a number to work with.
For example, a $1,800 annual policy costs $150 a month.
Ask about the deductible, too. That’s the amount you pay toward a covered claim before insurance pays its share. If your deductible is $1,000, you’ll want that money available when you need it.
It’s also worth asking about flood coverage. Standard homeowners insurance does not cover flood damage, so you may need a separate policy.
The numbers below are examples, not actual costs.
If your rent includes heat or water, paying those bills yourself may take some getting used to. Along with electricity and internet, check whether the property has separate heating fuel, water, sewer, or trash bills.
Ask the seller for a year of utility bills, if available. A full year gives you a better picture than one mild month.
For example, $2,400 in annual heating costs averages $200 a month. But you may need to pay a larger fuel-delivery bill during winter, so plan for when those expenses arrive as well as how much they cost.
Snow removal belongs in the budget, too. A $600 seasonal quote would mean setting aside $50 a month throughout the year.
If the home has a private well or septic system, ask about testing and maintenance costs. New Hampshire Housing’s Water Wellness course and study guide can help you understand what comes with owning a private well.
The numbers below are examples, not actual costs.
Some home expenses are predictable: servicing the heating system, cleaning gutters, and taking care of the yard. Others tend to show up at inconvenient times.
For routine work, get a few local quotes and turn the yearly total into a monthly savings amount. If those services cost $900 a year, setting aside $75 a month would cover them.
Then make room for repairs. Putting away $200 a month adds up to $2,400 over a year. That’s a useful cushion, but an older roof or furnace may call for more savings sooner.
Before buying, have a licensed inspector review the home, as New Hampshire Housing recommends in its steps to homeownership. If the inspection identifies work that may be needed soon, get estimates so you can factor it into your decision.
The numbers below are examples, not actual costs.
Considering a condo or a home in a homeowners association? Ask about monthly fees and what they cover. A $300 monthly fee adds $3,600 a year, usually paid separately from your mortgage.
Find out whether major projects or extra charges, called special assessments, are planned. You’ll also want to know which repairs and maintenance you’re responsible for yourself.
And remember the costs of getting settled. Inspections, closing costs, movers, curtains, and a lawn mower can all compete for the same savings. Ask your lender what you’ll need before and at closing, then make a separate list of move-in purchases. Some can wait until you’ve lived in the home for a while.
The numbers below are examples, not actual costs.
Once you’ve gathered bills and quotes, you can see what the home might cost each month.
If your mortgage payment already includes taxes and insurance, your additional budget might look like this:
|
Expense |
Example monthly amount |
|
Utilities and internet |
$350 |
|
Savings for snow removal |
$50 |
|
Routine maintenance |
$75 |
|
Savings for repairs |
$200 |
|
Total beyond the mortgage payment |
$675 |
Your numbers may be higher or lower, and association fees or other property expenses would be extra. The goal is to see what’s left for groceries, transportation, childcare, savings, and the things you enjoy.
New Hampshire Housing’s Income and Expense Worksheet can help you put it all on paper.
If you’re still figuring out where to start, take the free online Becoming a Homeowner course. It walks through budgeting, financing, and buying a home, helping you feel more prepared before you get the keys.