June 5, 2023

Homeowners Insurance

Particularly when it comes to homeowners insurance, remember that you have options. If your premiums with your current insurance company increase enough to upset your budget, it may be time to look into other insurance providers. Alternatively, if you find that your current policy lacks the coverage you need, you can always upgrade. We at the Guides Home Team have laid out our recommendations for the best homeowners insurance providers for various situations.

Homeowners Association Fees

Some new homeowners, particularly in townhouses and condos, may be part of a homeowners association (HOA). The fees for these associations, which should go toward the upkeep of community spaces, can be steep, sometimes costing hundreds of dollars each month. Hopefully, you were aware of the HOA fees before purchasing your home. Regardless, make sure to include this item in your budget.

Maintenance Costs

Unlike renters, homeowners are responsible for maintaining their residence and property. Typically, this will involve things like lawn mowing and HVAC tune-ups, but there’s always the possibility that something essential and expensive could break. Thus, you should have savings earmarked specifically for home repair. 

The Housing Counseling Network at the National Community Reinvestment Coalition (NCRC) is a HUD-approved collective of agencies made up of mortgage advisers offering guidance on budgeting, credit, financial management and savings techniques. Its director, Ibijoke Akinbowale, recommends planning to spend 1%–2% of your home’s purchase price in ongoing costs for maintenance each year. However, if your home is older or in poor repair, the percentage could be higher.

One way to keep your home maintenance costs lower and more consistent is to invest in a home warranty. This residential service contract helps cover the cost of repairs and replacements for covered home systems and major appliances that break down due to normal wear and tear, but these are not always worth the cost. 

You pay a monthly premium, and if a covered item breaks down, you call your provider, who will send someone to diagnose the problem. If it falls under the terms of your warranty, the technician will repair or replace the item for the cost of a predetermined service call fee.