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Owning a home for the first time (or just a new home if you’ve purchased before) can be an exciting yet daunting phenomenon. To help ease with the stress and potential worries, we’ve compiled five facts all homeowners should know. Also, we should preface this with the fact that while no one’s experiences are the same, it’s helpful to have a guide, even if it may not apply to you.
1. Stick to Your Budget
This one may seem obvious, but is harder to do than meets the eye. Set yourself a reasonable budget before you begin searching for you new home. This will help eliminate certain properties from the search, because it’s best not to shop out of your price range to begin with. Ultimately, sticking to what you can comfortably afford (key word: comfortably) will ensure you have more wiggle room for home maintenance, decor and actually living in the long run.
This is an important step in purchasing a new home, and should occur before you even start looking. Basically, the process involves providing your financial information such as income, debts and credit history to a mortgage lender who will in turn give you a letter with a statement of your likely approved spending amount. It’s a great advantage to have when negotiating with sellers, but it shouldn’t be considered a slam dunk. Just because you’re pre-approved doesn’t necessarily mean that closing a deal will be quick and simple, but it sure helps.
3. Home Maintenance is Important
Not to mention costly. Unlike a rental property, when the landlord will take care of all those pesky fixes, a property that’s yours requires maintenance out of your own pocket. Be prepared to take care of your home – after all, you did just spend your life savings on it, you want to maintain it and keep it in the best condition for both your living situation and if you wish to sell in the future. Apply common sense, too – older homes will require more maintenance at higher costs, while newer generally require less. Be sure to set some funds aside allocated to these types of costs.
4. Don’t Splurge on Furnishing
You just spent your life’s savings on a new house, you want it to look fabulous and feel like a home. We get it. But be reasonable with your spending. Purchase the essentials, and maybe a few nice things that will help bring that homey feel to your new place. Anything else can wait. Pick out the expensive luxuries you want and work hard to save for them. This will ensure that you can actually live in and enjoy your new home without any unnecessary added financial pressure.
5. Home Insurance
Get home insurance, immediately. This isn’t one of those things you can put off until there’s enough money to spend on it – obviously, seeing as your mortgage broker requires you to buy it. However, you might also need life insurance and/or disability-income insurance to cover and protect a partner or child who may count on your income, should something unpredictable happen to you and your wellbeing. Consider also car insurance or any other legal protection policies you may require, particularly if you’re a sole proprietor (self-employed) with less asset cover.
Now you can go forth and fulfil your homeowner dreams with all you should know fresh in your mind. Good luck!