3 Ways Your Housing Costs Might Increase Exponentially After You Move In

Prepare to start paying a lot more.

For many people, housing is their largest monthly expense. This holds true whether they rent a home or own one.

Research from The Ascent found that the typical American spends an average of $1,885 on housing each month. But if you own a home, your costs might be even higher when you account for your mortgage loan and other expenses.

Now, when you first buy a home, it's important to make sure your costs will fit into your budget. But it's also important to leave yourself with some wiggle room. That's because your housing costs might increase quite a bit once you've settled into your new home. Here are a few reasons that might happen.

1. Your property taxes could rise

Property taxes are never set in stone. Yours could increase over time by virtue of your home's value rising, even if you don't make any improvements to your home. And if you do make notable improvements, such as finishing a basement, you can expect your property tax bill to increase -- perhaps quite substantially.

2. Your homeowners insurance premiums could rise

Homeowners insurance protects you financially in the event of property damage. But the premium rate you're quoted for your first year of coverage may not be what you end up paying long term.

First of all, the more claims you file against your policy, the more expensive you can expect it to get. But even if you don't file a lot of claims yourself, if many homeowners in your area file claims and have the same insurance company, your costs could rise in time, too.

3. You might get stuck with a lot of repairs

Things that are glaringly wrong with your home when you buy it will generally be obvious to a seasoned home inspector. It's those smaller repairs that have the potential to sneak up on you. And their costs can easily add up.

Plus, the longer you live in your home, the more things might break on you. Your heating system, for example, might be perfectly functional at the time of your home inspection, only to start failing three months later without warning.

Don't max out your budget on mortgage costs

Your mortgage is the one housing expense of yours that probably won't rise in time, assuming you've signed a fixed-rate loan. Rather, it's your other expenses that have the potential to climb. That's why it's so important to not go overboard with your mortgage. That means you should aim to take on a monthly payment that isn't at the top of your budget, so you have wiggle room for other costs that might rise.

In fact, as a general rule, your total housing costs should not exceed 30% of your income. But you may want to aim lower -- like 20% to 25% of your income -- to give yourself leeway in case your costs rise at a rapid clip. The more flexibility you're able to give yourself, the less financial stress you're apt to encounter as a homeowner through the years.