Anticipating Maintenance Add-Ons to Home Loan Budgeting
When you first go shopping for a property in Hawaii, home loan budgeting – figuring out how much a comfortable monthly mortgage payment would be – pretty much dictates the price range you will be considering.
Some listings do the lion’s share of the home loan budgeting work for you through a ‘payment options’ box that provides a thumbnail mortgage payment calculation. You enter a percentage of the down payment, amount, and the type of loan – and at the speed of light, it calculates an estimate of the monthly fee. Those that also include the latest property tax bill and an insurance estimate come up with a pretty accurate picture of how affordable a given property will be.
An associated cost that home loan budgeting alone doesn’t address is the additional operating cost every homeowner runs into—the maintenance figure. Since those costs are dependent on the type and condition of the property, most experts advise future homeowners to anticipate 1% of the purchase price per year; a number that is transparent. There are a couple of approaches that can improve on it.
Invest in a Home Warranty
The first way is to invest in a home warranty, which has a set cost. Home warranties are the forms of insurance that cover the repair or replacement of included items. This way can be a relatively economical way new Hawaii homeowners can buy some budgetary peace of mind while familiarizing themselves with the ins and outs of their new Hawaii home. But it’s also an occasion where it’s particularly important to read the fine print – the only way to be clear on what the home warranty covers and what not, and what the deductibles are. It’s also important to get an idea of who the subcontractors will be.
Anticipate Replacements Costs
The other way to get a bead on possible future maintenance outlays is to anticipate likely significant replacement costs. Wood shake roofs, for instance, should last about 30 years, while fiber cement shingles last five years less (and rough weather conditions can lop years off those life expectancies). Wood floors can last for a century, as can marble and slate – while carpet usually needs to be replaced every eight to 10 years.
Home Appliance Replacement Budgeting
Most homeowners in Hawaii would agree that modern appliances don’t seem to last as long as they used to. This could be due to the added functionality of electronics or the fact that they are now made with less durable materials. According to research from the National Association of Homebuilders, the average lifespan of dryers (both gas and electric), cooktops, electric ranges, and fridges is around 13 years. Washing machines typically last about 10 years, while microwaving ovens, dishwashers, and compact refrigerators have an average lifespan of 9 years. Freezers can last up to 11 years, garbage disposals about 12 years, but unfortunately, trash compactors only average around 6 years. If the previous owner can provide the original warranties or purchase slips, it will give you a general idea of when you might need to budget for replacements.
Happy Home Loan Budgeting
In conclusion, when it comes to home loan budgeting, it is crucial to consider the potential maintenance add-ons that may arise. While focusing on the mortgage payment is important, it is equally essential to allocate sufficient funds for other inevitable expenses. By anticipating these additional costs and setting aside a portion of the budget for maintenance, homeowners can ensure they are prepared for unexpected repairs and upkeep. Taking a proactive approach to budgeting will not only provide financial peace of mind but also help maintain the overall value and condition of the home. So, remember to factor in maintenance add-ons when creating your home loan budget, and you’ll be better prepared for any unforeseen expenses that may come your way.