The True Cost of Homeownership Is Higher Than You Think
I love owning my home. I could probably never go back to renting. But when you sit down and look at the numbers, it can be shocking to see just how much homeownership costs you over the years.
Homeownership comes with a whole new set of costs and responsibilities you’ve probably never considered if you’ve rented your whole life.
If you get a loan, you have to pay the bank back, usually over 15 or 30 years. As the loan matures, you pay less in interest, and more in principal.
Principal and Interest
If you have a mortgage, your lender will force you to get insurance to cover at least the value of the loan.
Property taxes pay for things like schools, hospitals, and infrastructure. This one also varies wildly depending on what city and state you live in.
PMI is insurance for the lender in case you default on the mortgage.
PMI (Private Mortgage Insurance)
The general rule of thumb I see thrown around is repairs and maintenance on your home will cost 1-2% of the home value per year.
Repairs and Maintenance
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