You've done it. You've bought a home and now own part of The Dream.
In the process you've also acquired many responsibilities and concerns.
There are mortgage payments to make, records to keep and maintenance
work to complete. Below are a few tips for the new owner.
Every month you'll receive a statement from your lender reminding you
that your mortgage payment is due, or, if you have a coupon book, you'll
have to remember to send your payment on time.
Some lenders can automatically deduct monthly payments from your
checking account. This saves time and postage costs. It can also prevent
the possibility of missing a payment. Ask your lender about this
Furnishing and renovating
You've just moved in. Most of your belongings are still in boxes. But
you've decided the first thing you want to do is redo the first-floor
bathroom, buy new furniture for the living room and strip the wallpaper
from every wall in the house.
Stop. Put your hands in your pockets, seal your wallet, tie yourself
to a chair. Don't do anything major right away.
Acquiring a home requires some adjustment. Your mortgage payment may
be higher than the rent you've been paying, so give yourself time to get
used to the new cash regimen. Too many new buyers realize too late that
they had no idea how much it costs to run a home.
The message here is simple common sense. Go for a slow, smooth
transition. You'll probably be living in this house for a good while;
don't try to do everything at once, even if you can afford it.
Papers to keep
Keep a copy of every document you signed at the closing. It's especially
important to keep a copy of your settlement form. It will be useful when
you file taxes and if you sell your home. For example, the real estate
taxes and loan discount points you paid as part of your closing costs
are tax deductible. So, when you file taxes, refer to the settlement
form to get these amounts.
In addition to the closing documents, keep all insurance records,
such as homeowners and title insurance. You would need to have access to
your homeowners policy if, for example, someone were to sue you because
they were injured on your property. You would refer to your title
insurance policy if you were to find a flaw in the title after you
bought the house.
It's a good idea to keep these important records in a safe place. You
may want to store them in a safety deposit box or a bank vault in
addition to keeping a copy at home.
Your mortgage requires you adequately maintain your property and not
allow it to deteriorate. As a homeowner, you can't afford to sit back
and postpone maintenance. You can extend the life of appliances and
fixtures and avoid expensive repairs by performing routine maintenance
It's a good idea to set up a budget for your home's regular
maintenance and unexpected repairs. You may want to budget 1 percent of
the purchase price of your house to cover annual maintenance and
repairs. You also may want to stick to a regular savings plan to cover
essential bills, emergency repairs and large, periodic expenses such as
property taxes and homeowners insurance.