One may think that a down payment is the greatest financial obstacle one has to face when purchasing a new house, but let us tell you that there are numerous expenses linked with owning the home of your dreams. We have provided you some simple tips to help you handle those difficulties many people face when buying their first home.
1. Creating a New Financial Plan
One thing to consider is changing your budget, or creating a new budget, once you purchase your home. This may seem like common sense but there is more to it than that. Once you move from an apartment to a home, expect your utilities and maintenance bills to increase due to the fact that you are now moving into a greater space and are now responsible for maintaining that space on your own.
Instead of alternating a mortgage payment for your prior rent payment, spend some time tracking expenses, then update your budge so that it mirrors the actual cost of living in your new home. Since you may find that you will be spending more than expected, you will need to adjust some of your expenses such as travel and leisure.
2. Prepare to Spend Money on Upkeep and Maintenance
As mentioned above, you will be responsible to spend some money on maintenance and repairs to keep your home in great condition. Some repairs may be pricier than others such as major and unexpected projects like a leaky roof or an outdoor living space; the costs to repair these kinds of projects may make you adjust your budget even more.
3. Keep in Mind Property Taxes May Rise
Property taxes have a tendency to rise, and for several reasons. The first, and main reason is that property taxes are based on the Assessed Value of your home tied together with local city tax rates. So the higher the Assessed Value of your home, the higher your property tax may be when you acquired your home. Or for example, if you decide to perform various home improvement projects within your home that require a city permit, and is considered a capital improvement to the home. The Assessed Value of your home will rise, thus making your property tax higher.
Another reason for increase in your property taxes are proposition bond measures during elections. To protect yourself, the first thing to consider doing is consider 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 when compared to renting a house or an apartment. You will no longer have a landlord telling you what you can and cannot do, and most importantly you will be gaining equity by having a house that you personally own. So if you are in the market to purchase a new home keep in mind the tips mentioned above, but also see the positive impact it will have in your future.