Becoming a homeowner is a dream that most people work their hardest to achieve. Compared to renting properties, purchasing your own home will afford you a higher degree of financial freedom as well as a more stable financial future—in particular, a future that’s well-suited for starting a family.
But while homeownership secures your access to shelter, it also comes with costs like upkeep, beautification, tax obligations, and other recurring payments. Keeping track of these expenses can be overwhelming, but remember that it’s worth shouldering the burden to gain a lifetime investment that you can pass on to future generations.
If you’re a first-time homeowner or are planning to buy your own property soon, here are some of the expenses that will take up space in your overall budget. The earlier you prepare to spend for these items, the easier homeownership will be on you in the long run.
Down Payments and Loan Repayments
One of the biggest expenses you will make as a homeowner is the down payment for your new home. A lot of developers allow prospective homeowners to make monthly payments as part of a down payment scheme, which is usually agreed upon during the preselling stage. This results in a longer payment period, and therefore a lower monthly amortization.
Potential homeowners in the Philippines can also opt for bank loans and government-issued housing assistance like Home Development Mutual Fund (Pag-IBIG) loans to pay for their properties. If this is the route you choose, these banks and government agencies will loan you the amount needed for your home’s down payment, which you must repay along with interest.
If you secured a loan to buy your home, you need to make sure that you can follow through on your payments. In general, it’s best to avoid falling into a debt trap to make the succeeding years of homeownership more manageable.
Insurance
Homeowners’ insurance gives you a safety net for your finances in case disasters cause loss or damage to your property. When shopping around for insurance policies, make sure that you read the fine print, assess coverage limits, and abide by payment schedules.
That said, it might be a good idea to live in areas where disasters are hard to come by. Lipa City in Batangas, for example, lies in an elevated area between two mountains. Lipa residents are protected against the damages brought by flooding and typhoons, especially during the rainy season. If you prioritize staying protected against calamities, you can check out listings for a Lipa City house and lot for sale to kickstart your house-hunting. Regardless of where you live, though, it’s strongly recommended to get an insurance plan to safeguard your life savings when disasters hit.
Taxes and Homeowners’ Association (HOA) Fees
Buying a new house often comes with many real estate fees, including taxes. These taxes vary in their deadlines and payment schedules, so it’s important to keep track of these when buying a new home. Real estate taxes are typically paid either annually or every two to three years. Some of these taxes include capital gains tax, loan transfer tax, documentary stamp tax, and real property tax. You also have to pay the title registration fee, which is approximately 1 percent of your house’s selling price and is meant to cover the transfer of ownership.
If you’re buying a home in a subdivision, village, or any exclusive residential area, you also have to pay homeowners’ association (HOA) fees. Such fees are usually paid every month and cover the upkeep of neighborhood amenities such as street lights, clubhouses, swimming pools, and labor compensation for security guards and street cleaners. In essence, these fees secure your right to enjoy the facilities surrounding your home and support the people maintaining them.
Moving Costs
Moving to a new home can be burdensome, especially if the property is relatively far from your current address. You can use your own vehicle to move your things in batches, but this consumes too much time, energy, and gas money.
Before the big move, make sure that you’ve already laid out your plans for transporting your belongings, especially bulky items such as furniture. You may have to shell out a bit more if you’re moving across regions, so it’s best to factor in transport costs when determining your budget.
Decor and Appliances
You may have already planned out the appliances you will buy and where they will be placed in your new home. If you’re expanding your living space, you might also be thinking about buying extra furniture, too. You’re free to purchase the top-of-the-line items in your wish list, but it would be wise to opt for budget-friendly appliances and furniture first if you’re still working out your other home-related expenses. Once you’ve settled in, you can start filling your home with pricier and more high-quality items.
Utilities
Utilities are a mainstay expense that are tied to homeownership. It’s ideal to stay on top of your bills and pay for utilities such as water, electricity, and internet services on time. It will also help if your house is optimally designed to maximize the environment and minimize the burden on fixtures and appliances. For instance, high ceilings and large windows can provide lots of natural light in the daytime. Your house can also be constructed in a way that maximizes airflow throughout its interiors.
Of course, bigger houses often have more expensive bills. To keep your bills from ballooning, you may want to replace some of your appliances with energy-efficient alternatives. An inverter air conditioner, for example, will be more energy-efficient than a conventional non-inverter air conditioner since it consumes less power. Opting for environmentally friendly appliances will likely keep your bills manageable, as long as you also apply practices such as switching off the lights, unplugging devices, and closing faucets when not in use.
Renovations and Maintenance
No matter how carefully put together your home may be, there may come a time when a few changes are needed. Perhaps you’ll want to broaden your home’s interiors, add extra rooms, build a terrace, or maybe do some repainting or refinishing. You may be completely satisfied with your home at the moment, but it’s best to prepare for potential renovations nonetheless.
In addition to renovations, it would also be wise to watch out for potential maintenance needs. Burst pipes and appliance breakdowns are not entirely unavoidable, so make sure that you have enough in your savings or at least know potential funding sources to preemptively address these concerns.
Making the First Few Years Count
The truth is, expenses don’t stop once you sign the deed of ownership and get your house key. Lots of spending is needed to ensure that your home remains livable, legally compliant, and in tip-top shape. At the end of the day, however, these expenses will be worth what you pay to finally get the home that you want and deserve.
