Contributed by Maine 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, but in the end, it’s an incredibly rewarding milestone to achieve. However, 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. Recent nationwide reports suggest the typical U.S. family spends an average of $2,060 per year on home utility bills. Prospective homeowners need to factor in utility costs when determining whether or  not 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 

A home is far more than a roof to sleep under. In many cases, a home is one’s most valuable asset – an asset that most can’t afford to replace with out-of-pocket funds, in the event of a total loss or disaster. Homeowners insurance provides protection, and most lenders require that a buyer have insurance on a home, as it safeguards them (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 also need to know exactly what is and isn’t covered by an insurance policy. For example, would the insurer pay out what it would really cost to repair or rebuild a home today – or would they pay what the home is worth, minus depreciation? The average nationwide homeowners insurance premium in the U.S. is $1,211 per year.  

Property Taxes 

Beyond the mortgage, down payment, and insurance, it’s important to also remember to factor in property taxes. 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. 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. Be sure to budget for this ongoing, recurring cost, as property taxes must be paid each year. 

Maintenance and Repair 

Landlords are usually responsible for regular maintenance and repairs, but homeowners have to fund their own maintenance and repairs. 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. According to the 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 be setting aside $2,000 per year to cover any repair costs.