Budgeting for Out of Pocket Costs When Buying a First Home

Buying a home is an exciting time and you probably can’t wait to collect the keys and move in. Right now, you probably think you have all the costs in check. After all, the mortgage is in place and the funds are in escrow. But aside from mortgage payments and property taxes, there are other expenses you might not have budgeted for. Let’s review them in this article, so you can be as prepared as possible when the time comes to move into your first home.

Insurance

It’s easy to overlook insurance because it’s deeply unexciting, but if your new home isn’t insured, you could end up in a big financial hole. Property insurance protects homeowners – and the lender – from disastrous events like storms, tornadoes, flooding, and runaway trucks slamming into your living room.

Yes, the worst might never happen, but do you really want to take that chance? Make sure you have insurance in place, ready for when the property is legally yours. That way you won’t end up owning a very expensive pile of rubble.

Removal Costs

Removal

Hiring a U-Haul van costs money. The longer you need a van, the more expensive it will be, and if you want a one-way hire, it’s even more expensive. In addition, although shipping your stuff interstate isn’t too onerous, if you’re emptying a rental property, it won’t be very practical to do the job yourself.

Be sure to factor in the cost of moving your personal belongings and furniture. Have a budget in mind and if you can’t afford to hire a professional removal company like localmotion.com, ask friends and family to provide some muscle on the day. Be aware that it’s always less stressful to pay professionals, as they do this for a living. The more will go more smoothly and nothing will be broken when professionals move furniture and valuables – and if an accident does occur, they are covered by insurance.

Renovations and Repairs

Renovations

No matter how perfect your new home looked when you viewed it, there will be issues when you move in. All homes have problems, from dripping faucets to squeaky floorboards.

Have some money set aside to cover repairs that may come to light when you move in. Hopefully, if you have paid a surveyor to cast an expert eye over the property before you bought it, there won’t be any nasty shocks, but expect to have a few niggling issues to sort out in the early weeks and months.

Decorating

No two people have the exact same taste in interior decorations. Even if the property you buy is painted in strictly neutral colors, you will want to personalize it when you move in. Include some money in your budget to cover the cost of paint and items such as blinds and drapes. Factor in the cost of at least some items of furniture too, as chances are, you’ll want to buy a few essentials, like a new sofa or bed.

It’s a good idea to start saving for the out of pocket costs when you first decide to buy a home. The more money you have set aside, the better!

Budgeting for Out of Pocket Costs When Buying a First Home was last modified: by

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