4 Ways Your Home Could Cost More in 2021

Careful -- you could end up spending a lot more to live in your home for these reasons.

Whether you signed a new mortgage in 2020 or have been paying one off for years, you're probably used to spending a certain amount of money each month to live in your home. And if you're following a budget, which you should be, that amount should be factored into your monthly numbers to help you figure out how much you can afford to spend on other bills. But the tricky thing about owning a home is that over time, it can start to cost you more. Here are a few ways you may encounter that very scenario this year.

1. Your property taxes rise

When you own a home, there's no getting around property taxes. But those taxes have the potential to climb over time, which drives your costs up. Property taxes are calculated by taking your local tax rate (each city or town establishes its own) and multiplying it by the assessed value of your home, which is essentially what your home would sell for. Since home values increased tremendously across the board in 2020, if your home is reassessed in 2021, you could see your property tax bill rise. Some towns do annual assessments, and if yours is one of them, you may be in for an unpleasant hike.

2. Your homeowners insurance premiums go up

Even if you haven't filed a claim against your homeowners insurance in quite some time, if claims are up in your area, it could cause your own premiums to rise. If, for example, your area had a lot of storm damage in 2020, you may find that your homeowners policy costs you a bit more in 2021.

3. You improved your home in 2020 and now there's something new to maintain

Being stuck at home for most of 2020 drove a lot of people to make improvements to their properties. But in doing so, they may have given themselves one more thing to spend money maintaining. Imagine you installed a deck this past summer. While that may be a nice addition to your home, it also means you'll have to spend money this coming summer power-washing it and possibly restaining it or renting a sander to smooth it out. Be sure to budget for extra maintenance so you're not caught off guard.

4. You get hit with a costly repair

Even if you do a great job of maintaining your home, things can break when you least expect them to. And if that happens, you could find yourself staring at quite the hefty repair bill. Not only should you incorporate home repairs into your monthly budget, but you should also make a point to have a healthy emergency fund at the ready for those larger fixes your regular paycheck just can't cover. Doing so will help you avoid debt when things go wrong through no fault of your own.

You'll often hear that owning a home is more beneficial than renting because your mortgage lender can't raise your monthly payments mid-loan the way a landlord can raise rent. But remember, your mortgage is only one of many expenses that come with owning a home, and if any of the above things apply to you, your property could cost you more money this year. Gear up for that so you're not thrown off or driven into debt.