Home ownership is touted as the American Dream for good reason. Owning your own home gives you tax breaks, the freedom to make changes and the chance to build equity in your home. However, the cost of a home doesn’t end with the monthly mortgage payment. There are other monthly costs that you should be aware of if you want to stop renting and are considering buying Summit NJ real estate.

First time home shoppers browsing the Summit NJ listings often think of their budget as simply the asking price of the home. This way of thinking quite often gets first time homeowners in trouble. The price of the home is only the first step. There are several other costs you will have to factor into your monthly budget.

Before you jump into the market, be sure you’ve planned for all the costs associated with home ownership. There are plenty of on-line calculators and other tools to use to help you plan a budget. In addition, your Summit NJ real estate agent or a HUD-approved mortgage counselor may be able to counsel you on how to plan your finances so you don’t end up as a foreclosure statistic.

Here are a few categories of cost that you may or may not have thought about as part and parcel of home ownership.

Taxes
You’re probably expecting taxes but are you expecting your future taxes? Property taxes are not a fixed rate so plan for increases over time. You can expect your property taxes to be about 1% to 2% of your home’s value. You’ll also want to research other taxes like storm water run-off taxes, school taxes, fire department services taxes and other little fees that add up.

Insurance
There are several types of insurance to plan for when buying a home. Your basic home insurance policy will cost around $30-$60 for every $100,000 of value. You may also need to purchase flood insurance to fill in the gaps not covered by the policy. If you put down less that 20% as a down payment you might be paying for private mortgage insurance, too.

Sewer, Water, Electrical
Renters may be used to having utilities built into their rent. Make sure you have your Summit NJ realtor give you a good idea of the property’s monthly utilities. Be sure you’ve budgeted for these expenses.

Upgrades and Furnishings
Once you’ve bought a home, you will want to furnish it. Your new home will probably be a different size, shape or style from your rental. A purchase or two is inevitable so don’t use up every cent your have at closing.

Home ownership may have many costs but the benefits certainly outweigh them. You just have to plan your budget with these costs included.