As a new homeowner, you have many responsibilities. It is essential that you take the time to read and understand any contracts and agreements associated with your home purchase.
One mistake that many first-time homebuyers make is putting too much money into home improvements. This can cost you in the long run when it comes to resale value.
1. Failing to Budget
Owning a home is considered the American dream, but it can also be a costly mistake. New homeowners should sit down and work out a budget that thoroughly covers all costs associated with owning a home.
They should consider everything from their mortgage payment to any increase in utility costs, homeowner’s association fees or maintenance or repair expenses.
New homeowners should also make sure they have enough money saved for emergencies. After all, a sudden windfall or inheritance could change things in an instant.
2. Failing to Save a Down Payment
One of the biggest mistakes new homeowners make is failing to save enough money for a down payment. This can be a big mistake because there are many costs associated with homeownership that may not be obvious at first, such as property taxes and insurance premiums.
To avoid this mistake, start saving as much as you can and consider setting up automatic withdrawals from your bank account to help you stay on track. Also, try to pay off high interest debts before buying a home so that you can save more of your paycheck.
3. Failing to Get Pre Approved
When shopping for a new home, you should be preapproved before beginning the process. This shows sellers that you’re a serious buyer and that you can afford the mortgage.
If you don’t get pre approved, it’s important to understand why before you begin the buying process. That way, you can work on whatever issues are preventing you from getting the loan you need, like paying down debt or fixing inaccuracies on your credit reports. That will help you avoid the common mistake of finding a dream home that you can’t afford.
4. Failing to Get a Home Inspection
Home inspections are important for identifying serious issues with your new home. Unlike a standard inspector, who can focus on things like peeling wallpaper and chipped paint, disaster inspections examine the structural integrity of your home, and the safety of its core systems.
Inspectors check for things like leaky pipes and make sure the electrical system is safe and provides enough power to your home. You can find a certified home inspector using online resources, or by asking your real estate agent for recommendations.
5. Failing to Get a Home Warranty
Home warranties are a good idea for new homeowners, as they can help cover expenses if appliances and systems break down. However, it’s important to carefully review a home warranty contract before signing on the dotted line.
Home warranty providers typically use an arbitration process instead of going to court, where both parties must appear at hearings and provide documents and testimony. This can make the entire process more complicated.
If you’re purchasing a new home, the builder may already offer a manufacturer’s warranty for appliances and systems. It’s also worth considering the benefits of a warranty over creating an emergency fund to cover unexpected repair costs. For more information on warranties, https://www.cinchhomeservices.com/faq-library/-/faq/what-is-a-home-warranty and sites alike can provide you with resourceful information.
6. Failing to Make Repairs
Buying a new home can be very exciting, but it also comes with a lot of responsibility. You will need to pay your mortgage payments, deal with maintenance issues and possibly renovate the property.
You should also get a property survey before making changes to your property. It will help you avoid mistakes like building a fence two feet into your neighbor’s yard or planting trees too close to your home’s boundary line.
Moreover, you should be careful not to over-improve your home. Doing so can negatively affect resale value.
7. Failing to Take Care of Your Home
Buying your first home is a huge milestone, but it’s important to remember that with homeownership comes responsibility. Failing to take care of your property can lead to costly mistakes, like planting trees too close to the property line or putting up fences that extend two feet into the neighbors’ property. It’s also important to get a property survey so you know the exact boundaries of your home. Over-improving your home can cost more than it will return in resale value.
8. Failing to Save for the Future
Failing to save for the future can be a big mistake for new homeowners. It can cause you to live paycheck-to-paycheck, which is stressful in itself, and it can also make it hard to afford a major life event like a vacation or a home renovation project down the road.
Buying a home is a major investment, and it’s important to remember that you should always be thinking about your budget and financial goals. Avoid these mistakes to ensure that you’re making the right decision for your future.
Harper Harrison is a reporter for The Hear UP. Harper got an internship at the NPR and worked as a reporter and producer. harper has also worked as a reporter for the Medium. Harper covers health and science for The Hear UP.