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How to Address the Hidden Costs of Homeownership

Woman fixing plumbing

Homeownership can offer a lot of security, but it can also come with many hidden costs. These include property taxes, homeowners insurance and scheduled or unexpected home repairs. Some of these expenses may be small; others can range from several hundred to several thousand dollars. Although they can feel overwhelming, tackling these costs doesn’t have to be hard. A thoughtful approach can help you anticipate everything you’re likely to face as a homeowner — and rise to the challenge.

Take stock of your homeownership expenses

Eliminating the issues associated with hidden costs starts with having a clear understanding of what you’re getting into. A good way to do this is to make a list of all of your expenses, including things such as property taxes, insurance policies and homeowners association fees. Be sure to also take into account any additional costs you may not have considered, such as flood insurance if you live in a flood zone or landscaping and lawn care.

Once you have your basic expenses down, focus on any repairs you may have to tackle in the months and years ahead. These can include big repairs such as a new roof if you live in an older home, or smaller plumbing and electrical repairs that may have gone overlooked over the years. Doing this should give you an overall idea of how much you can expect to spend over both the short- and long-term, allowing you to plan accordingly.

Include homeownership costs in your spending plan

There’s nothing worse than having to pay for an unexpected or hidden expense and realizing that you don’t have the funds to do it. Creating a spending plan can help you avoid this. Plus it can offer you a clear sense of what you’re able to tackle in any given year. This plan should be based on your existing budget and savings, and it should leave a little wiggle room for any smaller unanticipated expenses that may come up.

Once you’ve added up your other expenses, you’ll need to carve out a budget for basic home maintenance. A good starting point is to set aside 1% of your home’s value to tackle any issues you may need to address over the coming year. For example, if your home is valued at $300,000, you’ll need to set aside $3,000 to cover those expenses. By tracking all of your costs in one place, you’ll have a better sense of how much you’ll need to spend on hidden costs each year. This makes it easier to come up with a solution to handle those needs.

Find the right financing solution for homeownership costs

Great planning can help you address many hidden costs, but the reality is that you may need some extra help depending on your financial situation. This is where a Discover personal loan can be a great option. With no closing costs, no origination fees and a choice of flexible repayment terms, Discover can help you finance everything from new floors to a brand new roof while allowing you to design your loan around your individual needs. A Discover personal loan has a fixed rate that will never go up and one set regular monthly payment. So, you know how much you’re paying each month and for how long, allowing you to tackle those expenses without sacrificing your financial security.

Hidden costs can amount to hundreds or even thousands of dollars each year, but having a plan in place can help you anticipate and address them in a manageable way. And for those times when you need additional financing, a Discover personal loan can help you get funds fast; your money can be sent as soon as the next business day after acceptance.

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