The First Year of Homeownership: Advice for Creating a Budget
When you’re house hunting, it’s natural for the cost of your home mortgage loan to be front and center in your mind, but it’s also important to remember that the cost of homeownership is much more than the your monthly payment. The additional costs can come as a surprise to many first-time buyers, especially during the first year that they are in the their homes. After you sign the agreement for your home mortgage loan, follow these steps for creating a budget.
Learn About Property Tax and Insurance
Property tax and homeowner’s insurance are unavoidable payments you have to make for your home. If you put down less than 20%, you will need to pay for private mortgage insurance. Know what these costs will be before you decide to buy a home so that you can consider them in your overall budget. Keep in mind that these costs can be significant, depending on where you live and the size of your mortgage, so plan ahead for paying them.
Consider HOA Fees
One expense that takes many homeowners by surprise is fees for HOAs—homeowner’s associations. Although these fees are modest in some places, they can be substantial in other communities. Find out what the fees and terms of payment are for your new community and be sure to include them in your budget. Failing to pay these fees will lead to costly fines, not to mention unpleasant interactions with your new neighbors.
Get Real About Ongoing Costs
The true cost of homeownership involves everything from buying furniture to replacing your water heater. It is helpful to put money into a savings account every month that you can use for unexpected repairs and other home expenses. Let this fund build up over time, and only tap it when you truly need it, so you won’t be caught underwater financially when an expense arises.
At GCS Credit Union, our representatives will help you understand the full cost of homeownership when you apply for a home mortgage loan in O’Fallon. We also make it easy to manage your money with online banking and a variety of account options. For more information about our credit union, call (618) 797-7993.