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- It was hard enough to let go of my down payment money, but I was not prepared for a wave of unexpected costs in my first month of homeownership.
- I learned I'll be paying Private Mortgage Insurance for years, an extra $100 a month expense.
- Plus, my insurance company demanded I install a new roof, sewage backed up into my basement, and more.
Becoming a homeowner is a milestone, and one I'm especially grateful to have pulled off in tough circumstances.
First, I lost income due to the COVID-19 pandemic, which is hurting many of my fellow millennials' homeownership goals.
Then, there was the surprisingly competitive housing market. I got extremely lucky and managed to snag one of my city's increasingly rare affordable homes: Mirroring a national trend, there are fewer than 20 homes for sale under $275,000 in my mountain town of Asheville, North Carolina.
And although saying goodbye to the down payment — a sum I had worked so hard to save — was scary, I had a monthly mortgage to look forward to that was cheaper than the rent I had paid for years.
But the relief didn't last for long: Turns out, there were a myriad of unexpected costs to tackle in my first month of homeownership.
Here are a few to look out for if you're thinking about becoming a homeowner.
My monthly mortgage includes Private Mortgage Insurance
One of the unexpected costs I paid in my first month, and will have to get used to paying for a while, is Private Mortgage Insurance.
PMI, as it's known, is meant to protect your lender in the event you default on mortgage payments, and it's required for homebuyers who put less than 20% down.
Eventually, I won't have to pay that extra $100 a month, but it will be years before my payments reach 20% equity on the house.
Roofs, even very simple ones, are quite expensive — especially when they're eco-friendly
Speaking of insurance, your homeowners insurance company might have some surprises in store for you.
I thought I was in the clear after relaying over the phone basics about my water, heat, and year the roof was built. But a few weeks after moving in, the insurance sent someone to make an in-person assessment, and fixes I thought I could put off a little longer had to be tackled right away in order to stay covered, starting with the roof.
With the pressure on right away to replace the roof, I (fortunately) at least knew what I wanted: a shiny metal roof. But when I saw the price tag, I almost caved and went with asphalt.
In the end, I decided it'd be better to have a roof that I really loved seeing every day, even if it came at a cost. And after shopping around, I found a metal roof priced with a less-huge disparity from asphalt shingles — but it was still $800 more expensive.
Whether it's replacing the water heater, furnace, or old windows, tackling the job in an eco-friendly way often comes at an additional cost, although you'll generally save money long-term because of efficiency.
I changed the locks, especially because my house had been a rental
I didn't actually realize the house was a rental until I got the keys, and at that point, the prudent move was to change the locks.
Even if the house hadn't been a rental, I still would have been on the hook for an expense: I didn't actually receive all the keys. There was one door with a deadbolt and no matching key, leaving no recourse but to replace the entire lock.
Sewage backed up into my basement
Having the sewage back up into the basement is as disastrous as it sounds, especially considering how much stuff was stored down there.
The city was at fault, so the cost of fixing the problem didn't fall on me at least. But a lot of items were ruined, adding up to a substantial unexpected cost. That was the first time I truly missed having a landlord to bear the burden.
The sewage backing up in the first place had to do with an expensive underground problem
The city's best guess was that the sewage problem stemmed from root growth underground.
And what's underneath your home might surprise you when it comes to the cost of maintenance.
For instance, I thought digging up bamboo shoots would be a job that required a few hours of paid labor. Turns out, substantial bamboo eviction requires much, much more than a few hours of work.
And since there's no way to know what is really going on underground, you might have to factor in some costly surprises.
I had to pay for a storage locker
Speaking of storing items in the basement, those floors had to be refinished before I could put my stuff back downstairs, so I had to keep my stuff in a storage locker in the meantime.
Even if you want to go the route of refinishing floors before you move in, you better factor in the cost of storage — something I did not.
DIY projects will save you labor costs, but materials aren't cheap
Speaking of the floors, that was one of the projects I tackled myself.
I was fortunate to have access to a tool library, so priming the floors didn't come with a hefty rental price tag for a sander.
However, I was so busy relishing how much I had saved by not hiring a professional that I vastly underestimated what the price tag of a stain and polyurethane finish would be.
One thing I learned though when it comes to materials for house projects: Buy the bigger container. Always. It's cheaper. And you'll need it.
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