The costs of home ownership

There are a variety of expenses involved in purchasing and maintaining a home of your own.

A couple admiring their new home.

Understand all the costs before you buy a home

Instructions: Click each type of expense to learn more.

Down payment

Most loans require a down payment. Many military servicemembers qualify for Veterans Affairs (VA) home loans. Typically, VA home loans are available with no down payment to qualified borrowers and under special circumstances. This provides way more flexibility when you first buy a home. However, there are special circumstances. See Loans for military service members: VA and FHA for more information.

Closing costs

Generally speaking, closing costs are paid by the borrower (and in some cases the seller) in addition to the purchase price of a home or condominium. These may include the origination fee, discount points, appraisal, credit report, title insurance, attorney’s fees, survey, and prepaid items such as tax and insurance escrow payments. It’s common for these costs to total between 3% and 5% of your total mortgage. You will receive an estimate of these costs from your lender after you apply for a mortgage. A VA loan may or may not require you to pay closing costs. The VA sets limits on the amount military members are required to pay in closing costs, but be sure to check with a mortgage broker to learn more. Read about typical closing costs.

Mortgage

Because houses have such a high price tag, almost everyone borrows some, if not most, of the money they need to buy one. You’ll probably need a home loan, or mortgage, from a mortgage lender. You’ll need to pay back the mortgage by making regular payments (usually monthly) over a period of years, with interest.

Home repairs and maintenance

The cost of maintaining your home and land. The amount will depend on the condition of your home, its exposure to the elements, the care with which you treat it, the number of people who live in it and the type of usage.

Property taxes

Taxes typically paid at least once a year to one or more governmental authorities. The amount is based on the market value of your property as determined by the county where the property is located.

Insurance

Homeowner’s or hazard insurance protects you against financial losses on your property as a result of fire, wind, natural disasters, or other hazards.

Home warranty protection

A home warranty is a type of insurance that some homeowners purchase to cover repairs to major systems such as plumbing, electrical, and heating systems, as well as installed appliances.

On the plus side, your home value may potentially increase over the years.

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