6 items to add to your budget when you purchase a home

Getting ready to buy your first home in Colorado Springs?

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Many first time home buyers don't realize that there are many other costs involved in home ownership. If you thinking about buying your first home, make sure and get a good understanding of these costs and include them in your budget.

Here's a list of some potential monthly fees and expenses you'll encounter.

(1) Insurance No lender is going let you purchase a home without insurance. This insurance typically provides basic protection against fire and theft. It's important to note that many times it does not cover flood damage; and you may be required to purchase additional flood insurance if you live in a flood-prone area. Also, ask your insurance agent if you can combine your homeowner's insurance with your auto insurance to get a better price. Most lenders will require that your property taxes are escrowed and included in your monthly payment.

(2) Property taxes Tax rates vary vastley in different neighborhoods in Colorado Springs as well as in different counties, but your home is taxed on its assessed value, an amount equal to a portion of its appraised value. Taxes can add hundreds of dollars to your monthly payment. Most lenders will require that your property taxes are escrowed and included in your monthly payment.

(3) Private Mortgage Insurance (PMI) If your down payment is less than 20 percent of the mortgage value, you will have to pay PMI (Private Mortgage Insurance), which protects the lender against you defaulting on the loan. This amount will also added to your monthly payment.

(4) Home Owners Association Fees If you're buying into a subdivision or a townhome community, you may have to pay for the monthly upkeep of common areas and other shared expenses. Some HOA fees are paid yearly and are very cheap; but there are also some than run $200.00 to $400.00 a month. These fees are not optional if you live in one of these communities and it's important to understand exactly what the fees cover.

Also, HOA can charge special assements to make unexpected (and unbudgeted) repairs to the roof, windows, streets. These items can have a large impact on your budget.

(5) Utilities If you're moving from an apartment to a home for the first time, your utilities bill will increase. Before you purchase a home, call the Colorado Springs Utilities; and they will be able to give you an average of the utility bills for the home for the past year. Also, make sure and factor in the cost of your water bill, especially if you are adding new landscaping or putting in a new lawn.

(6) Maintenance Be sure you have some money in your monthly budget set aside for repairs and upkeep It may be for small do-it-yourself things like replacing light bulbs and furnace filters or the occassional serious issues that crop up from time to time. (Furances and hot water heaters don't last forever. Either does carpet or appliances!)

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