If you’re buying your first home, you know that there are a lot of expenses. You need to pay down the cost of the house and then figure in any mortgage costs like insurance, taxes, utilities, and more. But did you also know that there are some other expenses to take care of as well? Here are 5 tips for first home buyers that can help make sure that you don’t run into any surprises when it comes time to closing.
- Mortgage repayments are something that first-time buyers are very concerned about. They can be downright exhausting! Before you buy your new place, you must do some homework and figure out how much you’ll need to borrow within a certain amount of money. Calculate both monthly mortgage repayments and regular monthly expenses like food and gasoline so that you have an easy idea of what you should be aiming for.
- Be realistic about what you can afford. Many first home buyers are so excited about the prospect of buying the new place that they easily get carried away with the dream of buying everything that they want. However, this can spell disaster for your finances. Remember that when it comes to the first home buyer, it’s really important to keep realistic expectations about the cost of a home.
- Budget first. A lot of people assume that they’ll be able to borrow a great deal of money for a home purchase without first considering their budget. But remember that first home buyers don’t have infinite funds – they will have to plan their budget for any unexpected costs, like extra medical bills or repair costs on your home. It’s also a good idea to talk to a real estate agent about your home loan options to see if you can borrow more than you thought.
- Be flexible. One of the best tips for first time home buyers is to be flexible with your mortgage repayments. When you buy your first home, you don’t have to immediately start paying off all of your debts, which can be a shock to your finances. Instead, plan for those unexpected costs in advance and ask a family member or close friend to help you out until your debts are paid off. Or look into a mortgage refinance to reduce your monthly repayments. If you have extra money after you pay off your debts, you can use it to help you afford the costs of your first home.
- Get a home improvement loan. If you can’t afford your mortgage repayments, you may still be eligible to apply for a home improvement grant from the government. Look into the KiwiSaver home start grant – this special grant that is designed to help first home buyers with any extra costs relating to their purchase.
- Live within your means. While this might sound like a fairly simplistic tip, it is one of the most important. Many people often find themselves in serious financial trouble when they are unable to make their mortgage repayments. The problem is that while you shouldn’t borrow more than you can comfortably afford to pay back, you do need to be disciplined about how you spend your money and live within your means. This can be difficult, especially if you find yourself in a situation where you are desperate for anything that will help you get through the rough times.
- Keep your spending under control. The first home buyers’ most important tips aren’t about living below your means. They’re about controlling your spending so that you don’t go into debt and ruin your credit rating before you even own your first home. A good rule of thumb is to only borrow what you have to spend on and to cut down on unnecessary borrowing and credit cards.