Home ownership was always a goal of mine, even when I was in debt up to my ears and had no clue how to manage my finances. When I began to dig myself out and improve my financial situation, I learned as much as I could about how to buy a home. As a single woman buying my own property before the age of 30, it was important for me to be an informed consumer–I had worked too hard to take control of my finances to let misinformation guide me to make yet another financial blunder!

While a lot of my research was centered around the actual process, I also made sure to learn as much as possible about the money side of things. I was surprised to learn that there’s far more to the story than just the down payment and monthly mortgage obligations.

Mortgage Insurance

If you’re ready to buy a home but don’t have the standard 20% down payment, it is still possible for you to realize your dream of owning your own home by paying for mortgage insurance from companies such as Genworth.

Essentially, mortgage insurance is protection from default for your lender. It gives your bank or investor better peace of mind about taking on the risk of loaning you the money needed to buy your home.

In return for this security, you’ll be required to pay the price of the premium (which can be paid monthly, annually or upfront during your closing). If you decide to take this route, don’t forget to factor this cost into your savings plan before you being the buying process!. The good news is that most requirements for mortgage insurance expire once your equity reaches about 80% and you’ve illustrated an ability to make on-time payments consistently.

I personally didn’t have to pay for mortgage insurance, but I know people who have opted to go this route in an effort to keep more of a cushion in their savings account.

Renovation Expenses

In most cases, the home you move into will need some sort of facelift, whether it be major renovations or simple, cosmetic fixes. When I moved into my condo, I had to fix some drywall and repaint the entire place. I also made a variety of small improvements to make it feel more like “my” home.

All of the fixes and improvements added up much quicker than I’d originally expected. However, I didn’t feel too much of a pinch because I had saved an additional 5% of my purchase price specifically for these expenses (I also included decorating costs). When you’re determining how much you need to save, ensure you’ll be in the position to pay for your wishlist items because the list is pretty much never-ending and there’s no landlord to cover the costs for you.

Property Taxes

This may seem like a no-brainer but I’ve been shocked to hear about the number of people who overlook the tax responsibilities of home ownership. Sure, you can claim the amount you pay for property taxes on your tax return each year, but the benefits don’t outweigh the cost. Plus, you’ll most likely have these paid through an escrow account, which you may pay into monthly. When you’re crunching the numbers for how much home you can afford, absolutely make sure to factor in the cost of property taxes.

If you live in an urban area, you may be lucky to qualify for a residential exemption. If I had one of these, I’d appreciate the smaller monthly payments, but I’d probably still sock a bit of money away in my savings account because cities and counties can discontinue this type of program at any time.

If you’re a homeowner, what are some of the other surprising expenses you encountered while buying your home?