First Time Home Ownership: More Than Just a Mortgage
With the mortgage industry being so prominently featured in the news, it’s easy to forget that a mortgage is only one facet of home ownership. And Fannie Mae in response is now requiring many first timers to get home ownership counseling before getting approved for a community homebuyer loan. Here are the things people are most likely to forget when purchasing a new home, according to Kiplinger.com.
1. It’s more than a mortgage. Home ownership involves significant costs–like taxes, insurance, and homeowners’ association dues. If you used to live in an apartment, your landlord probably picked up the cost of some utilities–like garbage pick up and water. Now, you’ll have to pay them. And your utilities may be higher as well–most people buy houses that are bigger than their old apartments, and these bigger spaces can cost more to heat and cool.
2. There will be repairs. And you don’t want to be broke when the laundry room is flooding or the fridge is fried. Put money aside for these emergencies–they will happen. You can buy a home warranty when you purchase a home–or even better, get the seller to pay for one to get you through that first year of home ownership.
3. Yards can be expensive. The idea of your own yard can be entrancing–especially if you have a family. Just keep in mind that if you want to actually spend with your family you will be shelling out serious cash to maintain the yard. Or you get to enjoy weekends filled with mowing, trimming and weeding. And don’t forget the cost of buying tools, fertilizer, mulch, topsoil, plants and other extras needed to spruce up the place.
There really should be some kind of Murphy’s Law for home ownership. But in the absence of guidance from Murphy, the wisest move is probably to buy less than you think you can afford, and save more than you think you’ll need.
