Budgeting Tips for New Homeowners

Becoming a homeowner is an exciting milestone. After saving for the down payment, navigating the buying process, and moving into your new home, you may be wondering what’s next. Now it’s time to settle in as a homeowner.

Most of the available resources focus on how to save and buy a new home but what happens after the moving trucks leave? It’s time to learn how to budget as a homeowner. A well-planned homeowner’s budget can help you manage the financial obligations of owning a home. Here’s what first-time homeowners should plan for when creating their homeowner’s budgets.

Upfront costs

Let’s start with the upfront costs of buying a home. The most obvious cost is the down payment which typically ranges from 3-20%. Closing costs may include fees such as appraisals and surveys, title search fees, attorney’s fees, recording fees, etc. It’s important to remember that closing costs vary greatly depending on the location of the home and other factors like whether or not you hire an attorney or broker. Additionally, don’t forget about moving expenses! If you plan to hire movers or rent a truck they must also be included in your budget.

Recurring costs

Now let’s talk about recurring costs associated with owning a home. In addition to the monthly mortgage payment, you need to plan for home insurance (or hazard insurance if applicable) which protects your home from damages caused by fire or weather events, and homeowners association fees for the upkeep of shared community spaces (these will depend on where you live).

Then there are property taxes that are paid annually, and you’ll want to plan for maintenance costs. As a SummerHill homebuyer, you won’t need to worry about maintenance or repair costs for a while but it’s still a smart idea to save about 1% to 2% of the purchase price of your home each year to create a slush fun. Finally, there are the monthly bills like utilities, cable/internet, and phone. 

Budgeting process and tips

The most effective budget is the one that works for you and your family’s needs. The best thing to do is create a spreadsheet containing all income sources along with projected expenses based on past bills and estimated future expenses for things like repairs or maintenance (which can often come unexpectedly). Monitor spending regularly so you can easily identify areas where adjustments need to be made as needed. Also, keep track of changes in income when making adjustments so you have an accurate picture of what your budget looks like at any given time.

Buying a home can seem daunting at first but with proper planning, it doesn’t have to be overwhelming! Knowing what kind of upfront and recurring costs are involved will help ensure that you are financially prepared for homeownership. Developing an effective budget tailored towards your family’s needs is paramount in making sure everything runs smoothly once you become a homeowner.

Visit us at SummerHillHomes.com to learn more about our communities, view virtual tours, schedule a private tour, and get ready to find your new home.

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