New homebuyers are often surprised by the wealth of expenses that they’ll be taking on when assuming ownership of their properties. One large part of planning for success in these endeavors is ensuring that your overhead costs are manageable. Without a keen understanding of how much you’ll have to spend to maintain your investment, you could find yourself in over your head when you purchase a home for sale in Irvine, CA.
When transitioning from tenant to property owner, you’ll be responsible for paying all of your home utilities. These include gas, water, garbage, sewer, and electricity as well as any cable or other special services that you want to have in your home. If you’re currently paying for all of these things in a rental unit, you’ll need to account for the difference in these bills once these same services have been transferred to a property with greater square footage.
Homeowners’ Associations collect dues from all property owners within the community, whether you purchase a house, condo, or townhome in for sale in Irvine, to pay for the maintenance and repair of all communal areas and features. These features can include swimming pools, dog parks, play structures and more. HOA dues are collected monthly and can range anywhere from $150 to $400 or beyond.
Property taxes are an unavoidable expense and one that could compromise your ownership if you fall too far behind. When buyers have their purchases financed by mortgage lenders, overhead costs like property taxes and HOA dues may be written directly into their loans and consolidated with their monthly loan payments. Tax rates vary by location and there are some areas that have special, additional taxes in place that contribute to the maintenance and development of new infrastructure. Understanding what your local tax rates are is essential for choosing a property that is actually in line with your budget.
You’ll need to bind home insurance to protect your investment. This coverage is also required by lending institutions in order to protect their financial interests. The costs of a comprehensive plan that is sufficient for meeting the requirements of your mortgage lender will likely range between 0.5 and 1 percent of your home mortgage loan.
Private Mortgage Insurance
If you intend to buy a home with a down payment of less than 20 percent, you may need to secure private mortgage insurance (PMI). This coverage will protect your lender in the event that you default on your loan. PMI can add several hundred dollars to your monthly mortgage payment, making it worthwhile to consider the benefits of saving for a larger down payment before buying.
In addition to coverage, taxes, HOA dues and full utilities among other things, you should also plan on shelling out money on a regular basis for property maintenance. This is especially true if you intend to invest in existing construction rather than a brand new home. Houses that have already sustained wear and tear are more likely to develop plumbing, roofing and even structural problems than those that have not.
Still shopping? Need help navigating the home buying process? You’ve come to the right place. Our Irvine real estate agents are experienced, knowledgeable, and specialize in Irvine properties. Call us today at (714) 454-6304 or check out our inventory online!