Budgeting When You Have Purchased Your First Home: Areas To Focus On
Buying a home in today’s world is much more of a challenge than in the past. Interest rates are pretty high combined with inflation, leading some individuals to move home to save. Renting simply is not an option for some if they are to save for a down payment. Wages have not kept up with rent prices and the overall increased cost of living. Florida has been hit quite hard due to an influx of people from around the country heading to the Sunshine State.
Budgeting when you have purchased your first home does prove challenging. Unexpected costs are a part of homeownership that very few inform new buyers about. The investment in the home appreciates, with property values going up along with increased equity in the house. Below are areas to focus on with your first home to create a detailed budget.
Home Warranty Options Help Save On Repairs
A home warranty can provide peace of mind for significant repairs. Customizing a home warranty will vary the price but can be so important. Unexpected costs can plummet a new homeowner into debt, leading to mortgage issues. Cinch Home Services, which offers home warranties, notes the importance of these contracts,” remember that unlike homeowners insurance, a home warranty plan covers the cost of repairing or replacing major appliances or systems in your home.”
Handling Home Maintenance Alone When Possible
Home maintenance can cost thousands per year, depending on the size of your home. Lawn maintenance might take a few hours per month but can cost thousands annually. Getting outside to handle mowing can be relaxing, as clearing your mind can be easy. Certain times of the year are far easier to handle lawn maintenance as the summer combines heat with increased rain. Weekly mowing can be a reality in the summer, which not all homeowners want to tackle solo.
Other areas of home maintenance need to be handled by professionals. HVAC maintenance twice yearly is a perfect example as this can increase the lifespan and efficiency of the system. Finding reliable home service professionals can be so important as you will need them at some point when owning the home.
Saving For Needed Renovations
Saving for needed renovations should be viewed as an investment rather than an expenditure. Saving is far easier with a goal in mind which can be a renovation that improves the quality of life of an entire family. Improvements that will stand the test of time, like replacing carpet with tile, are wise. Carpet is outdated and challenging to maintain compared to tile floors, which can have a classic look of wood.
Saving can be done by picking up a side hustle for a few hours daily. You would be surprised at how quickly money adds up when you do not need it for your monthly living expenses. A side hustle can earn thousands for the year, covering one or more renovations. The ability to pay with cash and avoid taking out a loan oozes convenience.
Increased Property Values Increasing Mortgage Payments
The excitement of a property’s value going up can be rivaled by a realization that mortgage payments will increase. A mortgage payment will increase as property values increase due to rising property taxes. So many homeowners are priced out of an area due to making an excellent investment in an up-and-coming neighborhood. Increased values also lead to higher rental prices to cover costs associated with owning a home.
Home insurance rates have increased immensely, with some companies leaving certain states. The requirements to be covered have also changed in areas with typical severe weather. The replacement of roofs is a main concern for the companies, which has led to many homeowners going uninsured. While this is an option for those without a mortgage, home insurance is required for those still paying off a home loan.
HOA Fees
Living in a community that has an HOA board can be a gamble. Some boards keep the community pristine without being overzealous. In other cases, fines for infractions not even in the HOA bylaws can be fines. Options HOA communities do exist, which can be considered if worried about neighbors taking care of their property appropriately. Depending on the board’s offerings, fees can be hundreds of dollars monthly. Community pools, fitness centers, and lawn maintenance are sometimes covered with fees.
The importance of setting a budget for various areas of life after a home purchase cannot be understated. Owning a home with timely mortgage payments for even a few years can lead to a massive ROI when the house is sold. Owning a home is one of the best ways to combat inflation in today’s world, which is a growing issue.
