One might think that the down payment is the biggest financial hurdle one faces when buying a new home, but let us tell you that there are numerous expenses associated with owning the home of your dreams. We’ve provided some simple tips to help you navigate the difficulties many people face when buying their first home.
1. Create a new financial plan
One thing to consider is changing your budget, or creating a new budget, once you buy your home. This may seem like common sense, but there is more to it than that. Once you move from an apartment to a house, expect your utility and maintenance bills to increase due to the fact that you are now moving to a larger space and are now responsible for maintaining that space on your own.
Instead of staggering a mortgage payment with your previous rent payment, spend some time getting expenses under control and then update your budget to reflect the actual cost of living in your new home. Since you may find that you’ll spend more than expected, you’ll need to adjust some of your expenses, such as travel and entertainment.
2. Prepare to spend money on upkeep and maintenance
As mentioned above, you will be responsible for spending some money on maintenance and repairs to keep your home in excellent condition. Some repairs can be more expensive than others, such as major and unexpected projects like a leaky roof or outdoor space; the costs to repair these types of projects can stretch your budget even further.
3. Be aware that property taxes may increase
Property taxes are trending up, and for a number of reasons. The first and foremost reason is that property taxes are based on the appraised value of your home along with local city tax rates. Therefore, the higher your home’s appraised value, the higher your property tax will be when you purchased your home. Or, for example, if you decide to do several home improvement projects within your home that require a permit from the city and is considered a major home improvement. The appraised value of your home will increase, which will make your property tax higher.
Another reason for property tax increases is the bond measures proposed during the election. To protect yourself, the first thing you should consider doing is considering voting. There are many bills on the ballot each year that affect your property tax once they are passed. You and your lender will receive a new bill for your new tax obligations.
Despite the few changes to owning a new home, there are also many benefits compared to renting a house or apartment. You will no longer have a landlord telling you what you can and cannot do, and more importantly, you will gain equity by owning a home. So if you’re in the market for a new home, keep the tips above in mind, but also see the positive impact it will have on your future.
