Buying a house for the first time is exciting!
But once you have the keys, don't let your excitement and inexperience take over. Avoid these five mistakes that often surprise first-year homeowners.
- Not budgeting for additional expenses
Although you can't envision every possible scenario, there will be additional expenses. Many first-time buyers don't think about extra money needed directly after closing for expenses such as movers, buying furniture, and deposits to get your utilities turned on. Additionally, you may have to purchase tools or other items you didn't need when you rented, plus still have an emergency fund in case something critical needs repairing.
- Ignoring small repairs
Dealing with repairs can be a mindset change if you're used to calling building maintenance every time something breaks. Repairs that start off small can be tempting to ignore.
Some repairs, especially those that involve plumbing or the outside of your house, can create bigger problems if ignored. When you're buying a house, it's a good idea to think of home maintenance as part of your monthly budget, even if you don't spend money on it every single month. That way, the money will be there when you do need it. The inspection report that was provided when buying your house is a good place to start when considering what to fix first.
- Going on a spending spree
It's easy to get excited about your new home and the opportunity to fill it with things you love. This causes some new homeowners to dive head-first into remodeling projects and buying a houseful of expensive furniture and appliances.
You're in your house for the long haul. Remodeling projects are usually a better investment once you have a little time to live in your new space. As long as you have the basics, quality furniture purchases can be spaced out to be more budget-friendly.
- Going with the lowest bid on a repair project
When you don't have experience with home repairs, it can be hard to know what questions to ask when hiring a contractor. Often the lowest estimate isn't the best option and may actually end up costing you more money in the long run.
Homeowners often assume estimates are set in stone, but that isn't always the case. Unforeseen circumstances can require extra time and money to complete a project.
Vastly different estimates are usually a good indicator that the project requirements are being viewed differently. Any estimate you get should be as specific as possible about what work is being performed, how long it will take, and what situations would incur extra charges.
- Not taking advantage of tax breaks
Buying a house is one of the biggest financial decisions you'll make. Take advantage of every incentive you can. Mortgage interest and mortgage insurance premiums are usually tax deductible. There may be state or local tax credits available for first-time buyers or those that have made energy-efficient or eco-friendly upgrades. Consult a tax professional in your area to make sure you're taking advantage of everything you can.
These common mistakes can cost you money and time, and is sure to cause you headaches. Being prepared and avoiding them entirely is a much better option.