How To Budget for Your First Home

Budget for your first home
There are many pieces to a budget. Photo via Images_of_Money on Flickr

There are some things you learn buying a home. Creating a budget for your first home needs to cover more than just your down payment, your mortgage payment and your utilities. Here are some of the things you need to learn about so they don’t surprise you when you purchase a home.

Closing Costs – Your closing costs may vary widely. Closing costs usually include all the fees and commissions associated with the sale and purchase of a home. During the purchasing process you may be able to negotiate that the seller covers the closing costs. You should ask your real estate agent what the closing costs will typically be in your city at your price range.

Mortgage Insurance – Unless you are putting 20% or more down on your home, your lender may require you to purchase mortgage insurance. Mortgage insurance is a monthly fee that covers your lender for the amount of your mortgage still owed if you were to die or stop paying your mortgage.

Home Insurance – You will definitely want home owner’s insurance if you are purchasing a home. Home owners insurance will protect you if something happens to your home or your belongings. You can not prepare for a fire or other disasters that could cost you countless thousands of dollars in repair and replacements. Home owner’s insurance will help you with that.

Repairs and Rennovations – If you plan on renovating your home or you know of repairs that need to be made you should get an estimate from a contractor prior to closing on the home. Once you have the home, Mint.com suggests that you budget 1-2% of the purchase price of your home towards home repairs. You may want to budget a bit higher during your first year or two in your home until you have a better idea of your home’s problems.

budget for your first home
You need to budget for someone else to do your yard work or for the equipment for you to do it yourself. Photo via Larry Page on Flickr

Landscaping – Landscaping costs can vary greatly from home to home. It depends upon what you have and what you want. Even if you are not making changes to your landscaping you need to budget for things like watering or sprinkler use. You also need to budget for yard work and upkeep, either paying someone else to do it, or the time and equipment you will need to take care of it yourself.

Furniture – This is another one where the costs can vary greatly depending on what you have and what you want. If you already have all of your furniture you will not need to budget much. Take stock of what furniture you do own. Once you are in your new home start with the basics if you do not have them covered. Don’t be over eager to fill up your home right away. Buy your furniture at a pace that is comfortable for you.

Moving Costs – This blog is here to help you get the inside scoop for your move, but every move has costs, from time and man-power to do it yourself or to pay for labor, moving help or movers to help you. uhaul.com will give you a quote to help you figure out the cost of your move.

HOA Fees – Before your purchase a home you need to know whether it is in a home owners’ association or not. If it is you should figure out what the HOA fees will be and what they cover.

There are many things that you might not expect when you are setting up a budget for your first home, and even the best budgets can be blown by unforeseen circumstances. Hopefully these tips cover a lot of what you might not be expecting.

Do you have any tips for how to budget for your first home, or are you someone who will be looking for your first home in the future? Let us know below in the comments.

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