Everything about homeownership
Apart from my mortgage, what are my monthly fees?

What are the costs associated with homeownership?

HOME OWNERSHIP 101

Your mortgage is the main cost associated with owning your home. Learn more about your mortgage. Apart from your mortgage, there are several other costs

Summary

If you partner with HomeLLC – your only monthly fees will only be your mortgage, your HOA, your home insurance, and your taxes.

You can avoid PMI by partnering with Home.LLC

you could also lower you mortgage payments by reaching 20% down

What are property taxes? Why do you need to pay property taxes?

Property taxes typically amount to 1% to 3% of the home’s value each year depending on where you live. This recurring expense doesn’t go away when you pay off the mortgage. It’s a perpetual cost of homeownership.

Some cities offer what’s known as property tax abatement or real estate tax abatement. To get a better understanding of what determines your property tax amount, read how property taxes are calculated.

Your property taxes pay for municipality expenses like fire protection, police protection, roads, protective services, and recreation. Renters don’t avoid property taxes, it is usually included in their rent payment.

What is homeowners association (HOA)?

A homeowners association (HOA) is an organization in a subdivision, planned community, or condominium that makes and enforces rules for the properties and their residents. Those who purchase property within an HOA’s jurisdiction automatically become members. Run by a board of directors, HOAs collect mandatory monthly or annual fees to pay for common-area and facilities upkeep.

Some associations can be very restrictive about what members can do with their properties. HOA’s may impose fines and even liens on non-compliant homeowners. Home.LLC cannot negotiate with HOAs on your behalf.

What is Private Mortgage Insurance (PMI) or Mortgage Insurance (MI)?

You can avoid paying Private Mortgage Insurance (PMI) by partnering with Home.LLC.

Private Mortgage Insurance (PMI) is a mortgage insurance that you are required to pay if your down payment is less than 20% of the home’s purchase price. Paying PMI is a tradeoff you’ll make to put a low downpayment or borrow more money. Unlike homeowners insurance, the PMI protects the lender (usually the bank), not you!

As you apply for mortgages, look carefully at loan estimates. A loan that excludes PMI will instead have a higher interest rate. You’ll have to pay the mortgage insurance up front (UPMI or Upfront PMI) as well as every month and will not be able to cancel it till you reach 78% LTV or you hit the midpoint of your loan term. PMI also won’t generate any value for you or in the home.

What is Homeowners Insurance?

Unlike a PMI (Private Mortgage Insurance), the homeowner’s insurance protects you. It covers losses and damages to your residence, along with furnishings and other assets in your home. Homeowners insurance also provides liability coverage against accidents in the home or on the property.

Every homeowner’s insurance policy has a liability limit, which determines the amount of coverage you have should an unfortunate incident occur.

The standard limits are usually set at $100,000, but the policyholder can opt for a higher limit. ‘Acts of War’ or ‘Acts of God’ such as earthquakes or floods are typically excluded from standard homeowners insurance policies.


Nik Shah

Nik is the founder and CEO of Home.LLC

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