Owning a Home Might Cost You Almost $1,200 a Month More Than Your Mortgage Payment. Here's Why

Mortgage lenders want to get repaid, so they tend to be at least somewhat judicious about giving out home loans. In other words, you're not going to qualify for a $500,000 mortgage when your income can only support a $100,000 loan.

But one mistake many home buyers make is looking at the monthly mortgage payments they'll be liable for and thinking, "Okay, I can handle that." It may be that you're able to comfortably afford a given mortgage payment based on your income. But what about the additional costs of owning a home?

Recent data from Zillow and Thumbtack found that the average U.S. homeowner is spending $1,180 per month on top of a typical mortgage payment. The extra costs include property taxes, homeowners insurance, utility costs, and essential home maintenance. And those are expenses you need to factor into your monthly bills if you're looking to purchase a home of your own.

Account for all of your homeownership expenses

The problem with getting approved for a mortgage is that lenders don't always account for the added costs that come with owning your property specifically. If you're buying an older home, for example, that costs $500 a month to heat and another $500 a month to maintain, that's not necessarily an expense your mortgage lender is accounting for when writing you a loan. So you need to do your research and account for those costs before committing to a home purchase.

If you're in the process of trying to buy a home, don't just look at the cost of your mortgage payments and property taxes. Rather, talk to the owner about what it takes to keep the home standing. And contact insurers so you know how much you might spend on a homeowners policy. If you have it in your head that homeowners insurance will cost you $1,000 a year when your price is closer to $2,000, that's a big difference.

Avoid going overboard when buying a home

A general rule of thumb to avoid overspending on a home is to keep your predictable housing costs to 30% of your take-home pay or less. So if you bring home $5,000 a month, you'd want your mortgage payment, property taxes, and homeowners insurance, which are all predictable costs, to amount to $1,500 or less.

The problem with this formula, though, is that it doesn't account for variable expenses like utilities and maintenance. And if those are higher than usual for your home, your finances could get thrown for a major loop.

So again, that's why it's so important to try to research the costs of owning your specific home. And if you're unable to get a good sense of what it'll cost to own your home outside of your mortgage, property taxes, and insurance, try to limit those expenses to 20% or 25% of your income so you have more wiggle room to tackle your other costs.

Owning a home can be a rewarding experience, but it can also be an expensive one. And that's okay, as long as you're prepared for that expense. But if you aren't, you might struggle financially once your new home becomes yours, so do as much digging as you can ahead of time to try to avoid that scenario.