The purchase of a new house is essentially a large financial investment. As with any major investment, careful planning and budgeting are required. In addition to securing a good mortgage and obtaining any additional loans you may need, you should also prepare for any unexpected expenses which may arise from owning a house.
New homeowners tend to underestimate the true cost of their new house. Mortgage and tax payments aside, a host of expenses can - and often do - crop up unexpectedly. A homeowner who fails to adjust his or her budget to leave room for such sudden money drains can quickly find him or herself falling behind.
So you've bought your new house, signed the paperwork, and are ready to move in. Everything's going well - until you start to realize just how much money you are spending. The cost of buying furniture and decorations and paying for delivery can add up very quickly, so be sure to account for it early on. One approach to doing this is to spread your purchases out over several months. This way, you can “cushion" the effect that they have on your budget.
Paying the Bills
Many people forget that life as a homeowner involves paying a slew of bills even beyond mortgage and loan repayments. Utility bills are often a culprit in ruining the budgets of a new homeowner. Former apartment tenants may be especially prone to overlook utility bills, because many apartment complexes cover one or more of these expenses. Even experienced homeowners can fall victim to this pitfall, however, simply due to the fact that different houses have different electricity, heating, and water requirements. For example, a house which is poorly insulated would run up the heating bill much faster than one which is well-insulated. A house with older plumbing may have leaks which affect the water bill.
Because of this, it is often a good idea to ask the previous residents for several months worth of utility bills. This will give you a rough estimate of how much you can expect to pay each month and allow you to prepare accordingly.
Fixing it Up
Houses, both old and new, can develop problems which need to be repaired. Unlike an apartment, where a broken appliance or leaky roof may be the responsibility of the landlord, a homeowner must bear the cost of repairs on his own. Since the very nature of these repairs means that they cannot be predicted, the only thing you can do is allocate a sufficient amount of money to pay for them in case of emergency. A good rule of thumb is to set aside around $100 per month.
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