Preparing to be a Homeowner

Sunday, October 4, 2015

As a soon-to-be homeowner, you’ve probably been focused hard on saving money to buy your home, making decisions about where to buy and what to buy, and daydreaming about your moving day. But that exciting day you move in is just the beginning of becoming a homeowner; a job that comes with joy and responsibility. After all, owning a home is both an emotional and a financial investment in your future. If you want your home to be a refuge and a place to share with friends and family for decades, you need to commit to being a great caretaker.

Adding value from the start

When you’re choosing optional finishes and features for your home, it can be tempting to pick the fun things that you’ve always such as a whirlpool tub or a deck. If you have an unlimited budget you can add everything you want, but if you have to stick to a budget like most buyers, it’s important to think about the options that will add value to your home and those that are more difficult (and more expensive) to add later.

For example, consider practical improvements such as upgrading the efficiency or size of your water heater or heating and air conditioning system to keep your utility bills even lower. If you think you may want additional space in the future, have a rough-in for a lower level bathroom or add that attic space now – you can always finish it later, but it’s easier if the structure is already in place. Spending money now on things that will last for years, such as hardwood or ceramic tile flooring or granite counters, can add immediate value as well as long-term value to your home.

Budgeting for the future

You’ve probably been focused on saving money for your home purchase, but now that you’ve accomplished that goal, it’s time to reboot your budget. Start by rebuilding your emergency fund to cover at least three months of your new expenses. Most financial planners prefer that you have six months’ of expenses in the bank if possible.

If you plan to make some big furniture purchases now that you’ve moved in, figure out how to pay for those purchases without digging yourself into a credit card debt hole.

At the same time, you should think about future projects for your home and potential repairs. In a new home, you can be assured that you won’t need to do any immediate appliance replacements or roof repairs, but it’s a good idea to know the life expectancy of your systems and appliances so you can be financially prepared in a decade or more for major expenses. Eventually you’ll need to repaint your home or make a repair after a storm, so it’s best to be ready for those future costs.

You may also want to start saving for home improvements that you could want to make in the future, such as finishing a lower level, adding a deck or upgrading your landscaping.

Routine maintenance

While new homes require far less work than an older home, there are some homeowner chores that kick in even in a brand-new home. When you do your final walk-through it’s a good idea to ask about a maintenance schedule for items such as changing the filter on your heating and air conditioning system, cleaning the gutters and changing the batteries in your smoke detectors. Your builder will give you manuals and warranties on your systems and appliances at the final walk-through. Don’t just file them away – they contain valuable information about what you need to do to keep your home in excellent condition.

It’s a good idea to schedule a monthly or seasonal tour of your home to make sure your home is looking good and performing well.

Financial check-ups

Another routine to add to your list of homeowner responsibilities is to schedule an annual check-up for your finances. Check out your loan information to see if you a refinance would be beneficial to you.

Review your homeowner’s insurance coverage annually to see if the premiums are increasing, reevaluate your deductible and to make sure you have sufficient coverage. This is especially important if you’ve made any major purchases for your home or any home improvements.

A good time to look at all the finances related to your home is when you receive your annual property tax bill. Even if the bill is paid through your mortgage company, check out your home value and estimate your new tax payment in case you need to adjust your budget.

While you’re being responsible with your home and your money, don’t forget to embrace the excitement of homeownership – paint your bathroom red or your bedroom purple and revel in your ability to do as you please with your property. 

Interested in a new home in St. Charles? Click here to download our free Homebuyer's Toolkit www.stcharlesmd.com/Toolkit.

Michele Lerner is a freelance writer with more than twenty years of experience writing articles and web content for newspapers and magazines on topics related to real estate, personal finance and business. Her work has appeared in The Washington Post,  NewHomeSource.com, Realtor.com, Bankrate.com, Insurance.com, HSH.com, The Washington Times, NAREIT's Real Estate Portfolio, and numerous Realtor association publications. Her latest book, "New Home 101: Your Guide to Buying and Building a New Home" and her first book, "HOMEBUYING: Tough Times, First Time, Any Time" are available now at Amazon.com or from MicheleLerner.com.