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Buying a home can be very exciting. But getting used to home ownership can be a bit overwhelming.
Between unpacking, getting to know the neighborhood and coping with the quirks of your house (e.g. where does that rattle come from?) And you don’t want to ruin your finances in the course of the move to home ownership. With that in mind, here are three key mistakes to avoid.
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1. Don’t budget for repairs
Home repairs can be viewed at any time. And while you should ideally have an emergency fund to cover this, it’s important to include an item in your monthly budget for ongoing repairs. Even small problems like leaking faucets cost money to fix. So, better to plan for these costs in advance rather than diving into savings to pay for them.
2. Don’t put money aside for quarterly property taxes every month
Some homeowners pay their mortgage loan service providers a lump sum each month that covers not only their monthly mortgage itself but also their property taxes. These loan services then pay these property taxes directly (they are usually due quarterly). This is known as an escrow arrangement and is quite common with mortgage borrowers.
But not every mortgage is structured like this. Your can be set up so that you pay your loan service provider just your monthly mortgage payment and you pay your property taxes directly to your city or town on a quarterly basis. If so, allow money for these taxes every month. Otherwise, you could endeavor to pay these bills when they are due.
For example, let’s say you owe $ 1,500 per quarter in property taxes. If so, you should set aside $ 500 per month in your budget to cover these costs.
3. Do not perform basic maintenance
You may think that giving up on your heating system maintenance or cleaning your gutters at the start of the season is no big deal. But if you don’t do basic maintenance, you can face bigger problems – and higher bills – down the line.
If you don’t maintain your heating system, a small problem like a loose component can escalate into a bigger problem, resulting in an emergency call and a high fee. And if you don’t clean your gutters, you can get water in the wrong places – like around your foundation – which can create costly problems down the line. A better choice is to make a list of the maintenance items your home needs and a schedule for handling them.
A home can be a great investment, and your home shouldn’t be a source of financial stress. Do your best to avoid these mistakes so that you can settle in and enjoy your new home to the fullest.
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