Owning a home is a wonderful thing, but actually buying one can be an expensive process that you may not be prepared for. There’s so much more than just the actual buying of the house when it comes to the financial part of buying a home. You have to think about the price of the home itself, the real estate agent, anything that may need to be fixed within the house, furniture and much more. This can all be a lot, so the best course of action is to budget for your new home. Read on for a few budgeting tips for purchasing a home.
Save For A Deposit
When you purchase a home, you typically aren’t required to pay the entire price up front. That’s what mortgages are for. While you don’t have to pay the entire price, you do usually need to put down a deposit. The typical deposit is a minimum of 20% of the overall price of the house, so depending on how expensive your new home is, that can be a pretty penny. If you’re not able to make a 20% deposit, you can sometimes make one that’s lower and still get a mortgage, but will likely have to also pay for private mortgage insurance between .5% and 1%.
Think About Expenses Beyond The Mortgage
While being able to pay your deposit and then your mortgage every month is important, you’ll want to take additional expenses into account as well. Homeowners have to think about the utility bills they have to pay each month, property taxes, and any repairs they may need to make on the home – whether they’re done as soon as the home is purchased or if a surprise repair needs to be done later down the line. Homeowners also can’t forget about homeowner’s insurance, which is just as important as all of the other expenses.
One of the most important things if not THE most important thing is that you need to be realistic when shopping for a home. While you might want a large home, and maybe you can even afford it, the actual upkeep of the home can be difficult to manage. Think about how that property might handle flooding or large amounts of snowfall. If the house is older and needs some fixing up, you’ll want to think about if you can afford to pay for someone to fix things up or if you can do it yourself – in terms of expenses, skills, and time. Lastly, if you purchase a larger than average space, you’ll have my rooms to fill, which means more money on furniture and the like.