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When it comes to buying a house, there are a lot more expenses involved than just the 20 percent down and monthly mortgage payment.  In fact, that’s just the tip of the iceberg.  According to Zillow, the average U.S. homeowner pays an extra $9,000 a year in hidden costs and maintenance.  Here are some expenses that are commonly overlooked.

Homeowner’s insurance

As a new homeowner, you’ll need to get homeowner’s insurance to protect your investment and personal belongings. The cost varies based on your location but the average annual premium is $1,083, according to ValuePenguin.  Keep in mind that if you live in a low-lying area, you may also be required to purchase flood insurance.

Private mortgage insurance

If your down payment is less than 20 percent of the home’s purchase price, be prepared to pay for private mortgage insurance (PMI).  This protects the lender in case you default on the loan.  PMI fees vary based on the size of your down payment and credit score but can cost between 0.3 – 1.50% of your loan per year.  Once you have at least 20 percent equity in the home, you can have the PMI removed.

Closing costs

Many first-time home buyers are shocked to learn that aside from their down payment, they’re also expected to pay closing costs.  Closing costs include appraisal fees, attorney fees, title insurance, property transfer taxes and inspection fees.  Depending on your location and the type of financing you obtain, your closing costs will be between 2-5 percent of the home’s sale price.

Property taxes

When creating your budget, don’t forget to factor in property taxes.  On average, your property tax will be about one percent of the home’s value.  The good news is your property tax is deductible when you file your federal tax return.  ezTaxReturn supports itemized deductions and is the easy way to get your taxes done, fast.

Furniture and decor

One of the best parts of owning a home is getting to add your own personal touches.  Whether it’s a fresh coat of paint, fancy artwork or new light fixtures, the cost of making the home your own can quickly get out of hand.  The bigger the house, the more furniture and decorative items you’ll need so consider these expenses and budget accordingly. 

Maintenance and repairs

It’s no secret that you’ll be responsible for any maintenance and repairs that need to be done but many first-time home buyers underestimate how much these projects will actually cost.  Between landscaping, gutter cleaning and pest control, the expenses can really add up.  A popular rule of thumb is to set aside one percent of the home’s value per year for maintenance.