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Budgeting for your first home can be an overwhelming process. If you’ve been living with family or sharing rent with roommates this may be the first time you’ve had a large monthly expense to budget for. Scary right? We make the process a little less intimidating by going through some important things to consider when gearing up to pull the trigger on your first home. So grab a pen and paper and let’s crunch some numbers.
Let’s start with a realistic evaluation of what you can afford. Our sales consultants can recommend a mortgage specialist that will help you determine the right price point for you.
A monthly budget is the best way to get an idea of what you can really afford when it comes down to it. Using your price range, create a monthly budget that factors in future mortgage payments, taxes, utilities and household expenses. Be realistic about your lifestyle when creating this budget as well. If you like to eat out every weekend, it will be a big adjustment to quit that cold turkey. Factor in lifestyle costs like these when deciding what to buy. Another thing that is commonly overlooked is closing costs. These can include prepaid taxes and down payment. Be sure to set some money aside for these costs, as they are usually required up front.
Before you officially own your new home you’ll have to make a down payment. This is a percentage of the purchase price that you pay up front, all at once – in other words, this is the scary part. The more you pay up front, the lower your mortgage will be in the future. Down payments can be as low at 3 percent of the purchase price of your new home. With that in mind, consider the cost of waiting when saving up for your down payment. With the yearly escalation in price, getting in earlier with a lower down payment may yield more profits then you save by waiting to avoid the extra costs.
When you purchase a new condo, you are given the opportunity to upgrade and personalize various options of your home decor. This may include things such as countertops, backsplash, flooring and lighting. It’s smart to set aside some funds within your total home-buying budget for these elements later down the road. Even if you don’t think upgrades are for you, a home furnishing budget is a good idea to set aside as well. Moving, furnishing and decorating a home can add up quickly.
Taking steps to maintain your home is good practice. Change air filters regularly, inspect caulking in tubs and showers, have you HVAC system service regularly by a professional and maintain drainage on your lot. These are just some of the things that will ensure the best return on your investment.