When searching for homes, it’s typical to tour many homes (and spend months looking online) before discovering the home you want in your price range.
When you finally experience this home in person, you’ll likely feel joy and excitement. After all, this home could be the setting for your next life stage!
But before you dive into the homebuying process, there’s an important (and often ‘hidden’) cost to consider: utility payments.
A new study found that utilities add a whopping 25% to homeowner costs
While utility payments often aren’t considered by homebuyers, a new study found that utilities add 25% to homeownership costs.
For many homeowners, utilities (electricity, natural gas, water, and sewer) are a ‘hidden’ cost that rank only behind mortgage payments and property taxes. This means you should consider utility bills when thinking about purchasing a home.
It’s easy to research a prospective home’s monthly utility payments
Some good news: you can analyze and predict a home’s utility bills through a range of methods. These include:
Asking your Realtor to request the seller’s last 12 months of electric, gas, water, and sewer payments
Researching and comparing home utility bills through websites like MyUtilityScore.com
Requesting your home inspector to analyze the condition of the home’s systems and materials that impact energy usage, including air conditioners, furnaces, insulation, and windows
By adding a the property’s estimated monthly utility bills to your mortgage payment, property taxes, and other bills you may have, you’ll have a more informed idea as to whether you can comfortably afford the house.
You can lower a home’s utility bills by improving its energy efficiency
Some more good news: if you determine a prospective home’s utility bills are more than you’re comfortable with, you can usually reduce these bills by improving the home’s energy efficiency.
Some methods for to improving a home’s energy efficiency include:
Increasing insulation
Adding caulk to seal leaky air
Use an advanced power strip for electronic equipment
Installing a smart thermostat system
Planting shade trees
Installing energy-efficient windows
You can also schedule a professional home energy audit to take a home’s energy efficiency to a the next level. For around $300 to $400, a trained energy auditor will provide personalized recommendations for your home based on measurements from thermographic scanning tools.
If you introduce the recommendations from your energy audit, you could lower your monthly energy bill by up to 30% while increasing your comfort!
For more information and tips on improving a home’s energy efficiency, visit the Energy Star website.
Utility bills should always be considered in a prospective home
When thinking about buying a home, it’s easy to be dazzled by the home’s amenities and features while overlooking utility bills. This is a mistake, as utility bills make up a substantial percentage of homeowner expenses.
By learning about these bills before buying the house, you’ll can more accurately judge whether you can afford the home. You can also determine whether you can improve the home’s energy efficiency to lower these costs.
If you’ve found a home to purchase and are interested in a mortgage, contact one of Open Mortgage’s friendly loan originators.