How To Correctly Estimate The Cost Of Owning Your First Knoxville Home
A home is a large investment. Up until this point in your life, it’s probably the biggest investment so far that you’ve made. Knowing that can be daunting, especially when you’re dealing with the unknown world of Knoxville mortgages.
Before you buy your first Knoxville home, it’s important to do some simple math so that you can estimate the cost of owning your first Knoxville home. Unfortunately, there are many buyers who do this incorrectly and end up being completely overwhelmed by the cost of owning their first home.
Since this is such an important thing to know before you buy your first home, we decided to write a post about it. In this post, we’ll show you how to correctly estimate the cost of owning your first Knoxville home.
First Things First: Always Overestimate
When you’re thinking about estimating what your monthly expenses will be when you own a home it’s always best to overestimate. That way, you won’t be completely overwhelmed with expense.
If you’re not sure what the cost will be, always add a bit to it, that way you’re over-prepared. It’s better to be happily surprised by the cost of things than to be so overwhelmed your monthly bills are too tight.
Mortgage (Principal + Interest + Mortgage Insurance + Escrows)
The biggest monthly expense you will have is your mortgage payment. Most Knoxville mortgages for first-time buyers include principal, interest, mortgage insurance, and escrows. You’re loan officer can let you know what you’re pre-approved for and give you an estimate on your monthly payment.
When it comes to estimating your monthly payment, it’s best to assume you’re going to spend as much as you feel comfortable spending. That way, if you spend less, you’ll be pleasantly surprised that you came in at less than you’re budgeted for.
Utilities are another cost you’ll want to take into account when you estimate the cost of you first Knoxville home. If you’ve been renting, you may be going from a much smaller space to a much large space.
When this happens, you’ll want to account for how much your utilities will change. You can see if the seller will tell you how much on average their bills will run or you can see if the utility companies will tell you as well
Garbage is another thing you may not be used to paying. Depending on where you live, you may or may not have to pay for garbage. If you pay city taxes, you won’t have to pay for garbage. Some HOAs also cover the cost of garbage pick up. Regardless, just be sure you know how much this additional expense could cost you.
You also should be prepared to pay for some home maintenance. It may not be something you pay for every month. But, you should be prepared to pay for basic home maintenance. Things like mowing your yard, mulching your yard, or fixing the AC when it breaks are all things you should be prepared to pay for. So, be sure that you have some money you’re sticking away every month for this occasion.
Depending on the neighborhood you pick, you may or may not have to pay for homeowner’s association dues. Some dues are mandatory while others are voluntary. Dues can be a couple hundred dollars a year or a couple hundred dollars a month. Just be sure you’re prepared for this added expense. Dues often come with benefits like maintain portions of the neighborhood or amenities like a pool
Essential Items For The Home
Finally, there may be some essential items that you need for your home. While not all of these items are expensive, they can add up when you have to purchase a bunch of them. Things like a washer and dryer, lawn mower, hose, or ladder are all things that you may find that you need when you buy your first home. Just be sure that you are prepared for the cost.
Bottom Line: Know Before You Owe
Owning a home is a big investment. Before you take the plunge into home ownership, be sure you know what your monthly expenses will be. It’s better to overestimate and be relieved by how much less it costs rather than to be overwhelmed and struggle to make ends meet.
Buying your first Knoxville home is an exciting and overwhelming experience. If you’re like most first-time buyers, you may not be sure where to start. If there is anything we can do to help you in your home search, please do not hesitate to contact us. We’ve helped countless homeowners buy their first home and we’d love to do the same for you. Rick can be reached at 865-696-9002 or via email at Rick@KnoxvilleHomeTeam.Com. Kati can be reached at 865-696-1888 or via email at Kati@KnoxvilleHomeTeam.Com.
Are you ready to start your home search? Visit our home search page to get started today. Or, be sure to keep up with our Knoxville First Time Home Buyer’s Blog to keep up with the latest information about buying your first home.