5 Expenses Homeowners Underestimate -- and How to Prepare for Them

If you're going to buy a home, it's important to know what you're signing up for.

When you set out to buy a home, it's important to crunch some numbers and make sure you're taking on housing expenses you can afford. That means accounting for not just a mortgage payment, but also peripheral expenses that are unavoidable when you own a home.

But often, homeowners fail to account for the non-mortgage costs they'll face. Here are five expenses property owners have underestimated, according to a recent ConsumerAffairs report.

1. Repair costs

Repair costs are one of the trickiest things for homeowners to budget for, namely because they can be so unpredictable. After all, you never know when your roof or heating system might need to be replaced, and how much you'll spend on a new one.

It's a good idea to factor some home repair costs into your budget so you're setting money aside every month for when they come up. But also, make sure to have a solid emergency fund before buying a home. That way, you'll have cash reserves to tap when major repairs occur.

2. Regular maintenance costs

Ongoing maintenance is a cost that should be a part of your budget. If you've been in your home for a while, comb through your bills from the past year or two and see what maintenance has cost you. That'll help you determine how much money to budget for each month.

If you're new to homeownership, ask your sellers how much they typically spent on maintenance and use that figure to guide you. Or, you can assume that you'll spend 1% to 4% of your home's value on annual maintenance, and figure out which side of that range you want to go with for budgeting purposes. (Hint: for an older home, the top end may be most appropriate.)

3. Homeowners insurance premiums

Homeowners insurance protects you financially in the event of damage, theft, or someone getting injured on your property. It's also generally a requirement for getting a mortgage.

If you're new to buying a home, it pays to shop around with different insurance companies and compare premium rates. If you've been in your home for a while and your premiums keep rising, you may want to consider signing up with a new insurance provider.

4. HOA fees

If you own a home that's part of an HOA (homeowners association), you'll generally be liable for monthly dues. But those dues could rise over time, making them harder to keep up with. Be sure to factor HOA fees into your budget and allow for the fact that they could climb. And if you're interested in preventing HOA dues hikes, try getting on your HOA board so you have more say in financial matters.

5. Property tax increases

Property taxes can rise over time, making homeownership more expensive. But many people don't realize that property taxes can also be appealed. If you recently got a new property assessment and tax bill, it pays to see if appealing it makes sense. Generally, you'll need to prove that your home is being assessed for a higher value than it's actually worth, to successfully get your taxes knocked down.

Owning a home can be tricky from a financial standpoint. Be sure to account for these expenses if you're going to take that leap.