How Buying a Home Changes Your Life
If you've just purchased your first home, congratulations are in order. It's exciting, but it can also be intimidating, as it's likely to be one of the most expensive purchases you'll ever make and you'll be faced with a host of new responsibilities.
Owning a home is a new beginning, so take a deep breath and prepare for your new adventure.
What changes when you buy a house?
Owning a home gives you a wealth of freedom and responsibility. In fact, virtually everything changes when you buy a home. While your monthly payments on the home may be similar to your previous rental payments, you'll also be responsible for maintenance and building insurance. This means you're likely to be more financially responsible. Additionally, you're likely to invest more in the future of your home and potential upgrades, so frivolous spending could be a thing of the past.
Balancing these obligations is the freedom to upgrade your home as you wish and the knowledge that the start of the month won't bring with it higher rent costs. Homeownership has its pros and cons, but the pros probably outweigh the cons.
The Joys and Challenges of Homeownership
If you haven't yet decided to buy a home, it's a good idea to get a better understanding of the most common benefits and potential risks of homeownership.
Benefits of Homeownership
- The payments build equity, meaning you can eventually sell the house for more than you owe.
- You can make changes to your home and the surrounding property.
- A home can be a good long-term investment.
- If you have a fixed rate mortgage, your monthly payments are stable.
- Mortgage interest , property taxes, and some closing costs may be subject to federal tax deductions.
Disadvantages of home ownership
- In an emergency it is not possible to call the landlord.
- Maintenance work is unavoidable and you are responsible for the costs.
- Upfront purchase costs, such as the down payment Once you factor in closing costs , you may be left with little money to spend.
- You probably won't be able to simply relocate if an attractive job offer or other opportunity comes your way.
- If property values fall, you may lose money when you sell.
- Although a home is usually a good investment, it can take months or even years to sell.
Things to Consider Before Buying a Home
For many people, buying a home is a rite of passage. However, it's important to understand the responsibilities that come with homeownership and decide if you're ready to buy now or if you should wait. If you're feeling uncertain about the question, "Should I buy a home now?", consider these points before making a decision.
- Costs of ownership. Just because you're eligible for a home equity loan doesn't mean you're ready to start paying off a mortgage. It's important to sit down and determine exactly how much money you want to spend each month .
- Commitment. Renting means you have more flexibility and can move quickly if an opportunity arises. While you could sell your home at any time, sales don't always happen quickly.
- Down payment. There are many great ways to help prospective home buyers purchase a home with a smaller down payment. However, a small down payment means higher monthly mortgage payments. Taking the time to save for a down payment can put you on more stable financial footing when you purchase your first home.
Checklist for New Homeowners
Buying a home is a hectic endeavor, and it's easy to forget all the things involved in the final details of closing the deal and moving in. Once the purchase is complete, it's time to get to work customizing your new home to meet your individual needs. Use this handy checklist to get the tasks done.
1. Complete these important tasks immediately
Completing a few tasks before and immediately after the move can help prevent future problems. Make sure you complete these important tasks as soon as possible.
- Make repairs. If you've bought a home that needs repairs, it's best to have the necessary work done before you move in. Even if you do the work yourself, it's much easier without furniture in the house.
- Clean. If you don't have time for a thorough cleaning before you move in, book a professional cleaning service. A thorough cleaning of bathrooms, carpets, floors, cabinets and appliances will allow you to move into a spotless home.
- Set up utilities. Formalizing your address change and setting up your utilities is a task you need to complete before moving day. You don't want to spend the first few days in your home without heat or running water.
- Take a break. Take the time to set up your new home without the demands of everyday life.
- Change the locks. No matter how much you like and trust the previous owners, you have no idea how many keys have been made or lost over the years.
- Find your shutoff valves. You can never be too prepared for an emergency. Being able to shut off the water, gas or electricity in your home immediately can help prevent serious damage. Know where all of your main shutoff valves are located, as well as valves for small, localized fixtures or appliances.
- Plan for emergencies. Make a list of local emergency numbers as well as reliable repair services such as plumbers and electricians in the area.
2. Complete these tasks to reduce the cost of home ownership
As a new homeowner, you face many expenses that you may not have taken responsibility for in the past. By taking care of these tasks, you can save money on your home's energy and maintenance costs.
- Lower the temperature of your water heater. Since most people never use water hotter than 120 degrees, it makes sense to save on energy costs by lowering the temperature of your water heater.
- Check the insulation in the attic. If your attic is not finished yet, you should be able to see the insulation between the rafters. If your insulation is thin or damaged, it's time to replace it. If you decide to tackle this job yourself, it's important to learn how much insulation is needed in your area.
- Install ceiling fans. By circulating air in each room, you can reduce the load on your heating and cooling system. Remember to use the reversing switch for the fan so that the air blows downward in the summer and pulls upward in the winter.
- Insulate your water pipes. Exposed water pipes lose heat as the water flows from the water heater to your faucets. Wrapping them in pipe insulation can help your water heater save energy.
- Check and clean your vents. Check all vents to make sure they are free of dust and other obstructions. Your heating and cooling system will have to work harder if the vents are blocked.
- Airtight seal your home. Reducing drafts in your home can save 1% on your energy bills. Overlay opens . Look for and repair leaks around windows, doors and electrical outlets.
- Mark basement cracks and keep an eye on them. Settling of the house foundation causes cracks in the basement wall. These cracks can be dangerous, especially if they get larger. Put duct tape over the cracks in your basement walls and check every few months to make sure the cracks don't get larger than the duct tape. Calling a specialist before foundation cracks get out of control can save you a lot of money.
- Plant shade trees. Shade trees near your home provide a natural source of cooling in the summer and allow the sun to enter your home in the winter. But don't plant them too close, as their growing roots could damage your foundation or future utility lines.
- Create a home maintenance checklist. Since home maintenance and repairs are now your responsibility, create a list to keep everything in shape.
Buying a home is exciting, but it also comes with a lot of responsibility. Understanding the buying process and your responsibilities will help you better prepare so you can enjoy your new home. To learn more about owning a home and the options available for buying your first home, speak to one of our mortgage advisors today .