Buying a home is an exciting prospect. It is an important financial step. When people think about buying a home they are worried about the cost of the mortgage, closing costs and their down payment. However, there are some costs that many people do not consider when buying a home. Make sure you budget for these expenses as you prepare your first home.
Home insurance costs more than renter's insurance, but it is a necessity. If you have a mortgage, your bank will require that you carry it. Even if you pay for your home in cash, you should carry home insurance because it protects your home from damage and other disasters. You should not confuse home insurance with primary mortgage insurance, which you will have to purchase if you do not have a down payment on your home.
Repairs and Maintenance
When you are renting, the repairs and maintenance are usually the responsibility of the landlord. When you own, you need to be able to pay for these costs yourself. You can do many of them yourself, but you will need money for the supplies. It is a good idea to have a fund to cover home repairs and unexpected times when you need to call your plumber. This can extend to yard care, and any home improvements you want to make to your home.
A new home means new furniture. Some homeowners go a bit crazy and replace a large amount of furniture when they buy a home. Even if you show some restraint, chances are you have an extra room or two that could be furnished, or you simply need a nicer couch for your living room. Be sure to plan for the added costs of furniture and to include it in your budget for your move.
As a homeowner, you should expect the cost of your monthly utilities to go up. Many apartments will cover water and trash pick up, and if you need to pay for it yourself, it is an extra bill each month. Additionally, your electricity and heating bills will likely go up if your home is larger than your apartment. The bigger the space, the more it costs to heat and cool it.
US News & World Report says that many new homeowners forget to budget in the costs of the move itself. Even if you are moving everything yourself, you still need to budget in the cost of renting a moving truck. Be sure to include this in your budget when purchasing your home.
Insurance is something that I carry in the hopes that it never has to be used. Along with life coverage, I also have low cost auto insurance and a health plan through my employer. I'm toying with the idea of adding some additional coverage, just in case something happens and I'm no longer around to take care of my family. The question that is on my mind is how much insurance is enough? Do I really need more, or would it be better to cultivate other assets that my loved ones can draw on if needed? If you are in the same boat, let's journey together for a while. Read on and I'll explain what I'm trying and why. Together, we can figure out when it is time to add more coverage and when enough really is enough.