To Avoid Having to Borrow Money, Homeowners Need to Be Smart
Homeowners need to be aware of all costs
Many new homeowners end up having to borrow money when trying to set up their new purchase. They already have a hefty mortgage to contend with, but failed to plan for additional costs associated with owning a new home. If you are in the market for a new home or will be any time soon, take a few minutes to do some research on the following items so you don’t fall into financial disaster.
Furniture and remodeling
Everyone loves buying new furniture and remodeling a house to customize it—both are part of the fun of moving in. For anyone who has just closed on a house though, budgets are probably still tight. Research shows that not only are savings gone for new homeowners, but their monthly expenses have most likely grown considerably since the move. New buyers are cautioned to think clearly. Is the beauty of a new granite countertop really going to make up for having to budget other areas strictly? Is a remodeled bathroom really going to pay for itself? Though it may sound nice, remember that there is plenty of time to plan for remodeling a few months, even years, down the road. Not every upgrade needs to happen in the first year.
When it comes to furniture, the same wisdom holds true. Think before you buy. White leather furniture may look great in a showroom, but imagine what it look like after children and animals have used it for a few months. Going overboard with furniture is one of the biggest unnecessary drains on new homeowners’ savings. The best thing to do is set a strict budget and commit to sticking with it.
Don’t ignore repairs
Sometimes it is easy to ignore a leaky roof or a noisy water heater, but ignoring them won’t fix them. It’s best to have a budget set aside for unplanned expenses and use it to cover the cost of routine maintenance. It’s a much better option to spend $65 twice a year for a licensed contractor to check a heating system than to have to replace it for thousands of dollars.
Another tip is to always work with qualified contractors when repairing things around your house. Though a homeowner may have to borrow money to cover the higher cost, it is worth it in the end because the repairman is a trained professional. He or she can fix the problem rather than give you a temporary solution.
Use a tax professional
Although many new homeowners have likely done their own taxes for years, now that a home is in the mix it’s best to get a professional to step in. Owning a home brings significant changes to taxes and the deductions that are allowed. A tax professional can help any new homeowner maximize their refund. It’s a good idea to let a tax preparer at least do the first year of paperwork and then follow his or her template for years to come.
Homeownership is an accomplishment
Owning a home is a huge accomplishment to anyone who manages the purchase successfully. The deal is not over after the closing. In a lot of ways, it just begins because that is when a homeowner is expected to take full responsibility for their property as a house and an investment. Careful planning can help first-time buyers avoid having to borrow money, dip into savings or accumulate credit card debt to manage.