Contributed by cPort Credit Union

Buying a home is often one of the biggest financial decisions anyone ever makes. The process of becoming a homeowner takes a great deal of patience and fiscal commitment, and it’s important to remember that the total cost of buying a home includes more than just a down payment and monthly mortgage. Below are the often-overlooked and unexpected costs of buying a home:  


Typical utilities include electricity, water, internet, heating and cooling, and waste management – if the municipality does not offer this service. Anyone who has rented an apartment is likely familiar with having to pay for utilities each month. However, after purchasing a home, the owner might see an increase in utility costs. A landlord may have previously covered the bill for some utility expenses, or sometimes tenants split the overall utility cost with other tenants.  Prospective homeowners need to factor in utility costs when determining whether they can afford to purchase a home. To get a better idea of what the costs will be for a particular home, request a copy of previous bills from the real estate agent or former resident.  

Homeowners insurance  

For many people, a home is an asset they can’t afford to replace easily in the event of a disaster. Homeowners insurance provides protection, and most lenders require that a buyer have insurance on a home, as it safeguards the lender (as well as the buyer) against financial loss. Buyers need to be sure to add in the cost of insurance when putting together a monthly budget, and they also need to know exactly what is and is not covered by an insurance policy. For example, would the insurance company cover what it would really cost to repair or rebuild a home at today’s expensive rates – or would they pay what the home is worth, minus depreciation? The average nationwide homeowner insurance premium in the U.S. runs in the thousands per year.   

Property taxes  

Remember to factor in property taxes. This is an ongoing, recurring cost, as property taxes must be paid each year. The cost of taxes will vary depending on where the house is located and the value of the home. Taxes are usually paid directly to the mortgage lender or local tax office. If paying through the lender, most likely a monthly payment will be required and sometimes is added to the monthly mortgage payment. If paying at the local tax office, there are usually two payments per year. A typical Maine resident will spend $2,435 per year on property taxes. 

Maintenance and repair  

Being a homeowner and a renter are very different when it comes to maintenance and repairs. Landlords are usually responsible for regular maintenance and repairs, but homeowners must cover these costs themselves. If the furnace stops working, for example, renters can call their landlord, who must coordinate and pay for the repair at no extra cost to the tenant; homeowners must take care of the costs themselves. According to the often cited “one-percent rule,” a homeowner should set aside one percent of the home’s value each year for home maintenance. Let’s say the home is valued at $200,000 – the tenant should set aside $2,000 per year to cover any repair costs.