Homeownership is, for many, the American dream. Having a piece of land and a roof over your head you can call your own (or, for a while, yours and the bank’s) is hugely satisfying, as well as a good long-term investment. Before you choose that perfect place — and commit to a mortgage — here are some tips other homeowners wish they’d known when they first purchased a house.
First — and this is a comment many homeowners repeated — remember to budget for repairs and maintenance.
A common rule of thumb is to save about 1 percent annually of the purchase price of your home for upkeep. If you spend $200,000 on your house, be sure to put aside $2,000 a year for the many things can break and require an infusion of cash.
That means if you think you can afford a $1,200 mortgage payment each month, what that really translates to is about $1,000 for the mortgage payment and $200 for repairs. It’s also safe to say that if a bank tells you that you can afford a $200,000 house, look for something 10 to 20 percent cheaper. Not only will that give you extra room in the monthly budget for that repair fund, but it will allow you to have a little more money when you first move in for items like curtain rods and curtains, rugs, lamps and all you’ll need to stock your pantry and cleaning closet.
Also, keep in mind your mortgage payment will fluctuate year to year because of changing costs for escrow items like home insurance and property tax.
Sometimes, more rarely, the bank will have overestimated the costs for the year and the escrow account will have a surplus, which will be refunded to you. But other years will invariably have an increase, and you’ll either have a higher payment each month or the need to pay a one-time fee to cover the increase. Budget for that as well. Again, don’t get a home that is so close to the most you can afford that any fluctuations will break your budget. If you get in a real pinch, bankingmyway.com has a few ideas for how best to handle the situation.
In an unscientific poll, quite a few homeowners also noted it’s important to consider several long-term issues.
If you intend to stay in the house for the long haul, is the design flexible so the space can be used in a variety of ways? Can it nicely accommodate an increasing number of children? Is there a room on the main floor, if there are two stories, that could be used as a bedroom? Is there adequate storage space on the ground floor as well? Both are important for aging owners or occupants: As one woman observed, “The older I get, the less I want to drag Christmas decorations out of the attic.”
Not only should you budget money for parts of your house that will break or fail you (at just the worst times, too), remember that maintenance will be on you.
Be ready to keep the house clean, inside and out, and clear out the gutters in the fall, mashvibes.com advises. Pay attention to your heating and cooling systems: Once a year, inspect and clean them, usually at the end of summer’s heat and before the cooler weather starts. If you have rooms you don’t really use, close the registers. With plumbing, learn where the intake valves are and even label them.
Plan to do some simple things right away that will save you money, both on maintenance and energy costs. Thesimpledollar.com has a list of 19 basic items, such as installing more insulation, putting in ceiling fans, cleaning vents and replacing air filters.
Next, stock up on basic tools that will help you as you add to your maintenance skills. Houzz.com has a great list of 20 items, including screwdrivers, hammer, a tape measure, level, utility knife, putty knife, pliers, adjustable crescent wrench, electrical cord, flashlight and ladder.
Get familiar with basic fixes. Houselogic.com has tips for seven, from fixing a leaky toilet or faucet to turning off the main water line.