Buying a home is a time to save money – not waste it!
Ah, the joy of buying a new home. That’s what you think before you get caught up in the often suddenly maddening process. When you’ve never owned a home previously, the idea of being freed from landlords, renting, leases, and close-proximity neighbors is enough to get you as excited as everyone has been for new Star Wars movies.
It can be a thrill, going through that process, but it’s also a time to be aware that a lot of unexpected issues will arise. And the sad truth of all is – and you must be prepared – most of these surprises usually come in the form of new expenses. The goal is to try to be prepared for such sneaky emergencies. Let’s see, you’ve already got your monthly mortgage, insurance, property taxes, homeowners association fees, etc… unless you are doing exceptionally well, your budget is likely pushed close to the limit already. But if you’re ready to take shots for anxiety, hang in there, there are solutions to implement…
So what can be done? How can you curb this influx of unexpected expenses? Well, you can start by making smart choices…
Don’t go nuts furnishing your home. Of course the excitement and desire is there but learn patience. You’re probably not used to living in a place as large as your new home, so you might feel a need to fill up lots of presumed empty space. Don’t rush out the day after you moved in to look at furniture. It’s too easy to get carried away and buy more than you can really afford. So, instead, let some time pass, get a better feel for your home, if there’s spots that truly feel naked occupy the spaces with inexpensive items in the meantime. There’s no shame in purchasing second hand items from the flea market or a thrift store as you can typically find some really stellar deals there.
It was nearly two months after buying my first home that I had my first housewarming party, I wanted it to be as close to my final vision as possible before I had the grand roll out. I gave myself time to adjust to my new surroundings and let things fall into place naturally. So just relax, and slowly digest the dynamic of your home while resisting the premature urge to start “charging it”.
Also, if you are among the unfortunate few who were unable to lay out a twenty percent down payment, you are likely paying an additional $100 per month with nothing in return thanks to the need to take out private mortgage insurance. This is an expense you want to be rid of as soon as possible. Making a few extra payments during the first few years of the mortgage is the way to go. It should help you lose the PMI while reducing the overall interest you’ll end up paying on your mortgage.
Along those lines, you have a choice – don’t get suckered into appliance warranties or related insurance. New homeowners are offered what is presented as a “deal” of appliance insurance that basically pays a random indemnity company a set amount monthly to insure the appliance against “natural” failure. Don’t be duped, it’s not in your best interest. You’d do better to save that monthly amount in your savings, if the time comes to replace the item in question you’ll have it covered without having to jump through hoops, still with the chance of your claim being rejected.
You’ll notice the immediate barrage of offers from landscaping and lawn care services from around your new neighborhood practically as you’re moving in. Sure, you want the best looking yard possible and they are going to try their best to win your business. Here’s the truth of the matter – they will charge you ten times what it would cost to do yourself – with relative ease. All you need is fertilizer, herbicide and a mechanical dispenser. Doing landscaping and lawn maintenance yourself is infinitely cheaper than outsourcing, and after you’ve got the grass growing, you may decide on some sort of outside maintenance, just gauge your time and ability and do what you can yourself. If you feel that this is too much of a chore, installing artificial turf is always an option.
Anyone of current generations knows something about energy efficiency. If they don’t, new homeowners find out about it quickly. Newly purchased homes can have some pretty cheap trimmings, from inefficient light bulbs, old windows with compromised insulation and the home itself may not be properly air sealed. Your best bet is to perform an energy audit. This will reveal where your new home needs help so you can do some problem solving asap instead of waiting until they drain your bank account.
Lastly, let’s discuss insurance. Don’t be in such a hurry that you fail to properly do your comparison shopping. And don’t fall into the convenient trap of settling on a plan offered by your realtor; of course it’s going to benefit them first. The truth is, by taking your time and shopping around, you’ll end up saving approximately thirty percent off your premium than if you were just to accept the first one that comes along.
It’s evident – buying a home and then proceeding carefully by taking smart steps is the best way to reduce your bills and expenses for your duration there. It’s a matter of patience, like all of those fans waiting for the next Star Wars film…