Owning a home is still very much the American Dream and is most likely to be the biggest investment you’ll make. Such an investment needs to be approached with a good understanding of the financial impacts which come with owning a home. The last thing you want is to be house-poor; you want to enjoy your home and can do so by being house-rich in terms of your overall housing budget. The following 4 tips can help achieve a house-rich home.
1- Be sure you get a mortgage loan you can easily afford. If you have a great credit score and solid income which gets you approved for a significant sized home loan. Just because you can get a larger loan, doesn’t mean you should accept it. Take some time to figure out exactly what your month home payment will be. Confirm what the interest and principle amounts will be, as well as added in property tax and insurance payments. Whether you pay these in one lump sum or separately, all of these go in together to make up your monthly housing payment.
2- Allow for additional expenses each month. Go beyond the basics of your monthly payments and be sure to have funds set aside in your budget for other housing expenses such as HOA fees and regular maintenance costs around landscaping and cleaning. You can save money mowing your own lawn, but there’s still a cost to getting this done, keep a list of all your regular expenses which you’ll be taking on with a home and avoid a forgotten surprise down the road.
3- Adjust your tax withholdings. When you buy a home one of the biggest benefits is the tax break you receive. This can be a rather large amount when tax season comes around but consider lowering your withholdings to give you more monthly in-pocket income to help cover housing costs. This will vary by individual circumstances, so a review of your pre-home tax withholdings with your tax advisor is recommended. You may be able to lower your withholdings to increase your income and still see an annual tax refund through your home.
4- Consider a Home Warranty. If you’re buying a home which has already been lived in, consider purchasing a home warranty. While an inspection will help you know what may need to be fixed right away, issues can crop up unexpectedly at any time, and your home owner’s insurance won’t help cover the cost of appliances that break down or repairing pipes that may leak. With a home warranty you have an extra layer of financial protection which can keep your out-of-pocket expenses at a minimum when repairs are necessary. With a newly constructed home be sure you know exactly which items and systems are covered in a warranty as well and consider your own warranty if what the builder or development offer is limited in scope.
Find more tips to be house-rich with this Realty Times article. When it’s time to buy or sell a home, work with a Realtor® whose experience and knowledge can help you from start to finish. The Driscoll Properties Team is here to help you achieve your home dreams. Learn more at our website, DriscollProperty.com, then contact the Driscoll Properties Team at 847-533-6786 to help you discover the home of your dreams.