Financial Tips for New Homeowners

Undoubtedly, like everyone else, a new homeowner has a variety of additional financial responsibilities and obligations on top of their mortgage and utility bills. You can easily fall into debt if you don’t budget your money. It’s important to make your monthly payments on time, and you’ll also want to have good credit for a credit card. Your credit score is key if you want a nice line of credit for any necessary home renovations.

If you don’t have a decent credit score, then you won’t be able to take out any type of loan, and you may not even be able to get a credit card. To keep up with any home improvement project as a new homeowner, you’ll more than likely need some type of loan. Be sure to figure out the ins-and-outs of home improvement loans before considering any renovation projects. This article will help you get a better grasp on some financial tips for new homeowners.

Budget for unexpected expenses you might have.


Unfortunately, after you close on your home the expenses don’t stop there. In fact, it’s only the beginning. You have to budget your money wisely and properly. There are chances you might need some home improvement done or there might be an unexpected increase in utility bills. You may need to replace your furnace or air conditioner depending on what state they’re in. Depending on their condition, you could call a technician to come in and repair your HVAC components as well.

You never know what’s going to happen when you’re a homeowner, and there are many unpredictable expenses, such as home renovation due to water damage or other damages. Be sure to inspect your home or have a contractor come in before you finish with your closing costs so that you can plan for these issues.

Purchase the right insurance plans.


Being a homeowner means that you have to purchase homeowner’s insurance, but there are many other types of insurances that a new homeowner should consider investing in just in case something were to happen as well. These other insurance options include life insurance and disability income insurance. When you purchase this additional coverage, you’ll be able to protect your family’s finances in case of unexpected incidents, such as illness or being laid off.

Don’t overspend on personalizing.


You’ve just handed your money over to purchase a new home and many costs go into that, such as a down payment, closing costs, and moving expenses. While it makes sense to want to add a little personal touch to your home, it’s not always wise to go over the top with this. Money is usually tight for first-time homeowners, and you might even need a personal loan for some monthly expenses thanks to the new costs of water, electricity, and insurance.

As a new homeowner, of course you’re going to personalize–especially since you’ve just made an upgrade from an apartment to a home. That said, you don’t have to upgrade everything all at once. Take it slow. While maple cabinets, a new sofa, or a fancier bed all sound nice, just be sure your budget (after covering renovations and your energy bills) allows you to purchase these items first.

Hire an accountant.


Being a new homeowner comes with plenty of new responsibilities, some you probably didn’t even know existed. It’s not just your average energy bills. There are also costs that come with your mortgage, property taxes, and home equity line of credit (HELOC.) A HELOC is considered to be a “second mortgage”. The thing about HELOC is that it can be used just like a credit card. You can borrow on as needed basis, up to the loan amount limit. Your lender may even issue a small plastic card much like a credit card, so you have access to your money easily. An accountant can also help you with your own tax return at the end of the year.

There are a lot of costs that come with being a homeowner, but it doesn’t have to be overwhelming. Use these tips to keep your renovations in check, your credit score high, and your budget managed and you’ll be just fine.