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by Maurie Backman | Published on Oct. 17, 2021
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If you've just purchased your first home, here are a few blunders you don't want to make.
Buying a home can be very exciting. But getting used to homeownership can be a bit overwhelming.
Between unpacking, learning your way around the neighborhood, and tackling your home's quirks (like where on earth is that rattling noise coming from?), it can take time to truly feel settled. And you don't want to wreck your finances in the course of adjusting to homeownership. With that in mind, here are three major mistakes to avoid.
Home repairs can pop up at any time. And while you should, ideally, have an emergency fund to help cover them, it's important to work a line item into your monthly budget for ongoing repairs as well. Even small issues like leaky faucets cost money to address, so you're better off planning ahead for those costs rather than dipping into savings to pay for them.
Some homeowners pay their mortgage loan servicers a lump sum every month that covers not only their monthly mortgage itself, but also their property taxes. Those loan services then pay those property taxes directly (they are generally due quarterly). This is known as an escrow arrangement, and it's pretty common among mortgage borrowers.
But not every mortgage is set up this way. Yours may be set up so that you only pay your loan servicer your monthly mortgage payment, and you pay your property taxes to your town or city directly every quarter. If that's the case, budget money each month for those taxes. Otherwise, you might scramble to pay those bills when they come due.
Say you owe $1,500 per quarter in property taxes. In that case, set aside $500 a month in your budget to cover that expense.
You might think it's no big deal to skip your heating system maintenance at the start of the season, or to forgo cleaning out your gutters. But not performing basic maintenance could leave you with bigger issues -- and bigger bills -- down the line.
If you don't maintain your heating system, a minor issue like a loose component could escalate to a larger one, resulting in an emergency service call and a large fee to go with it. And if you don't clean your gutters, you could get water in all the wrong places -- like around your foundation -- which could lead to costly issues down the line. A better choice is to make a list of the maintenance items your home requires and set up a schedule for handling them.
A home can be a huge investment, and yours shouldn't be a source of financial stress. Do your best to avoid these mistakes so you can settle in and enjoy your new home to the fullest.
Chances are, interest rates won't stay put at multi-decade lows for much longer. That's why taking action today is crucial, whether you're wanting to refinance and cut your mortgage payment or you're ready to pull the trigger on a new home purchase.
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