One may think that the down payment is the biggest financial hurdle one has to face when buying a new home, but let us tell you that there are numerous expenses associated with owning your dream home. We have provided some simple tips to help you manage 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 alternating your mortgage payment with your old rent payment, spend some time tracking expenses and then update your budget to reflect the actual cost of living in your new home. Since you may find that you will spend more than expected, you will need to adjust some of your expenses, such as travel and leisure.
2. Prepare to spend money on maintenance and upkeep
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 living space; The repair costs for these types of projects can make you budget even more.
3. Be aware that property taxes can increase
Property taxes have a tendency to go up and for a number of reasons. The first and foremost reason is that property taxes are based on the assessed value of your home linked to local city tax rates. Therefore, the higher the appraised value of your home, the higher the property tax will be when you purchased it. Or, for example, if you decide to do multiple home improvement projects within your home that require a permit from the city and are considered a capital home improvement. The appraised value of your home will increase, which will cause your property tax to be higher.
Another reason for raising property taxes is the proposed bond measures during elections. 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 of 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 most importantly, you will gain equity from owning a home. So if you are in the market to buy a new home, keep the tips mentioned above in mind, but also see the positive impact it will have on your future.