6 Tips To Budget For Your First Home – There is a lot to consider when buying your first home. Don’t just save for the down payment, consider other hidden costs. Don’t forget about the home inspection, repairs, closing costs and even moving expenses. Follow these next few tips when buying your next home.
1. Home Inspections – Home inspections are highly encouraged in order to make sure that there are not any major issues with the home you are buying.You never want to buy a home without an inspection. Inspections can cost $300 and upward depending on the type of inspection you get. Remember, the more thorough the better.
2. Closing Costs – According to bank rates annual survey, the average closing cost for a $200,000 home is about $3,754. Talk with a lender to get a general idea of what those costs will be. Closing costs usually cover lender fees, title fees, appraisal, and more.
3. Try Auto-Saving – Did you know that most banks can set up automatic transfers to your savings account from your checking account each month? You can also request that a certain percentage of each paycheck be deposited into your savings account. These are both effective strategies when saving for a big purchase and will add up before you know it!
4. Down Payment – Talk to your lender to get a general idea of what your down payment for your next home will be, as well as your loan options. The percentage of a down payment can vary greatly from buyer to buyer, but it is generally more cost effective to put down a higher rate. A larger down payment can save you on interest in the end depending on the home you choose, the loan you choose, and the money you have saved up. Talk to your lender about your options so you can plan.
5. Moving Expenses – Moving expenses are usually overlooked and end up costing more than anticipated. Planning ahead can help you avoid extra costs. Ask friends and family for help or do research on the most cost effective options in your area.
6. Decorating Expenses – Buying a new home is a very exciting process, especially once you are moved in and ready to decorate. Plan a budget for decorating costs as they can add up quickly as excitement increases. Furniture and large items can be purchased on credit to avoid up-front costs, as long as you plan on making regular payments. Always plan ahead and do your research but don’t forget to have fun!
Keep these tips in mind as you think about your next home purchase. It is essential to have a set budget and to plan ahead. Let us know in the comment section how these tips have helped you or if you have any tips of your own!