Owning a home is an exciting prospect that brings feelings of optimism and joy for people ready to purchase their first property. There is a long list of positives that come from home ownership, not least of which is building financial security for the future. Of course, new homeowners also need to be aware of some common financial challenges they may encounter as they get started.
Prepare Yourself For the Financial Costs of Being a New Homeowner
While it’s exciting to finally own your home, it comes with a lot of unforeseen expenses. In a recent study, millennial homeowners said that their #1 frustration was underestimating costs related to ownership.
From the sizable downpayment, to moving costs, to necessary renovations, to adding new furniture, the list of initial expenses can be substantial. Additionally, buyers need to consider closing fees, which can add 3-5% to the total amount due on a home purchase.
Make sure you account for these costs and work them into your budget before you purchase your home. This will help you avoid feeling financially insecure once you’ve signed the dotted line.
Expect the Unexpected When It Comes to Emergency Costs
You never know when a pipe might burst, a washing machine may stop working, or a storm may cause damage to your home. Ensure you are adequately insured with a Home and Contents Insurance policy, as an insurance deductible is far cheaper than replacing and repairing damaged items.
It’s also recommended to have a fund which can be accessed for home maintenance when the unexpected happens so that your finances are not suddenly and severely compromised.
The amount that experts advise to have on hand each year for such a fund is 1-3% of the total value of your home. So if you own a $300,000 house, it’s good to have at least $3000 per year set aside to deal with these surprise issues that can, and will, pop up.
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Keep Your Future Secure With Mortgage Insurance
One of the key reasons why people decide to own a home is to create a secure future for their family. The home you create will provide a place for them to have wonderful experiences and always have a place to live.
Having Mortgage Insurance will allow your family to be assured that even under tragic circumstances where you or your partner should pass away, there will be a financial backup plan to allow the mortgage to be paid for.
This policy provides new homeowners with complete financial security and peace of mind as they begin their long journey of creating a home and a family together.
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Don’t Leave Yourself Exposed to Underinsurance
You’ve worked hard for your house – ensure you protect it and your personal and priceless possessions inside it with Home and Contents Insurance. Knowing what is covered in your Home and Contents Insurance, as well as what is not covered, is important for homeowners to know in order to stay protected.
There are a number of questions you need to ask your insurance agent when it comes to your policy, including: does the policy cover damage to your land as well as your dwelling? Are expensive items covered– such as jewelry and high tech gadgets and equipment? Are you protected against all natural disasters or just select ones?
It’s also recommended to speak with your insurance agent about whether the current amount your home is insured for is sufficient to pay for necessary repair costs. With the cost of home repairs rising due to inflation, it may be time to reassess whether you need to get more coverage.
