Buying a home is a process that can often take a substantial amount of time, and cost a lot of money. As a new homeowner, it’s wise to expect a number of expenses, in addition to your mortgage and taxes. From closing costs to renovations and new furniture, buying your first home can prove to be quite costly. If you want to make sure you budget properly, and remain in control of your finances throughout the home buying process, here are a few solid tips to follow.
Unless you’re buying a brand new home, you will likely be faced with a few repairs; if you’re in a fixer-upper situation, your repairs could run you thousands. Older homes face tremendous wear and tear, and you’ll need to spend on different materials and tools to make fixes are or completely replace something. Having a separate budget after closing costs is a great way to ensure that you’ll have the right amount of funds to cover any necessary repairs or renovations. As time goes on, you can use your budget to focus on other things you may want to change in your new home.
Property upkeep is another financial factor to consider when purchasing your first home. You’ll need to set aside money throughout the year to save for general maintenance. Exterior projects such as lawn and landscaping, or interior projects like painting or purchasing new appliances, to mention a few.
Depending on where you decide to buy your home, you may need to factor Home Owners Association fees, into your budget. HOA fees can potentially add a few hundred dollars to your monthly expenses, in addition to your mortgage and other utility bills. Additionally, it is wise to consider other expenses, like homeowners insurance; which is sometimes required as a first time home buyer or buyers that are using an FHA loan. Never forget to factor in your property tax; depending on your location your property tax cost could vary.
Creating an emergency fund is essential when owning a home. It isn’t uncommon for an unexpected expense to come up that may require immediate payment. Plan ahead for things like this, and assure that you can handle a financial emergency. Contribute a percentage of your pack check every month into a separate fund that you don’t use unless you absolutely need to.