A mistake that many new home buyers make is not looking at the total cost of the house that they are about to buy. Only looking at the actual mortgage amount is a big mistake, as looking at that amount alone can fool you.

The principal and insurance amount of your monthly home budget can actually be relatively small when compared to the whole amount.

My friend and her fiance are looking at houses right now, and they are making a mistake when calculating their housing costs. They are looking at houses farther away because houses in the more rural areas are much, much cheaper. However, the costs that they are saving by being able to get a newly built house in a far away area are eliminated because of the long drive they will have to venture on every morning. They will both work more than 60 miles from their jobs and won’t be able to commute together.

Commuting costs should definitely be thought as, as demonstrated above! They also both have horrible gas guzzling cars, and will most likely be spending a little over $1,000 on gas every month.

When looking at houses, you should be looking at the overall costs such as the costs listed below:

1. Property taxes.

Many estimate that these will be lower, but in reality, property taxes are high. For us, property taxes equal approximately one-third of our total monthly house payment.

2. Private Mortgage Insurance (PMI).

If you don’t put a large enough down payment on the house that you are about to buy, then you will have to pay PMI most likely. This can end up being a large amount tacked onto your monthly mortgage amount, such as $50 or $150 per month.

3. Home Insurance.

The neighborhood you live in and the type of house that you buy play a big role in how expensive your home insurance will be. You can of course try shopping around to find the best price, but there can be other things making your home insurance high. If you live in a risky weather area (such as floods, high winds, tornadoes, etc.), then this will cause your home insurance expenses to rise.

4. Maintenance.

With houses, there will something that will go wrong eventually. Pipes might need to be placed, water heaters will need to be repaired and so on. Some of these expenses might be “low” and only be a couple hundred dollars, while others might be thousands. A family member needs their roof replaced, and they had multiple people bid on the replacement. The lowest bid they received was $65,000. And no, they are not being duped, they have a VERY steep roof and asbestos, so that’s the lowest that any place would offer. Keep these maintenance costs in mind!

Also, the furnace can be an expensive fix or replacement as well. A friend of mine had to spend $6,000 to get hers replaced. Keeping a home maintenance fund is very important just in case something does come up.

5. Landscaping.

Your house looks nice now, but will it require a professional person to come by every now and then to make the landscaping look the same? Will you be able to do it yourself? If you have a very large yard (acres and acres), then you will have to either hire someone to come often, or you will have to put time, labor and buy a reliable mower to cut your lawn.

6. Utilities.

Even if a bigger house may seem like a “deal,” it might not actually be. A bigger house will require more maintenance, landscaping, and higher utility bills.

7. Extras.

You might say “oh I’ll buy this house but I won’t get internet, cable, cell phone, etc. so that I can afford the house payment.” How realistic is this though? If you know that you will be buying these things, then you should budget this into your housing costs so that you aren’t running later.

Did you forget about any housing costs when you first bought?