Preparing for expenses as a new homeowner means being prepared financially. This includes figuring out where you will live during the first year of your home ownership. If you are not sure about this, it is wise to find a real estate agent or someone who has already sold their home and can tell you where you would likely end up. You need to figure out how much money you have to spend each month on housing, utilities, taxes, and other expenses. These Canberra plumbers also point out that you should have a savings account designated for emergencies, such as clogged drains, burst pipes, etc.
One way to be prepared for your future living costs is to do research and get an estimate from an online company that helps homeowners prepare for these types of questions. These estimates allow you to see how much you can afford to spend each month and help determine where you should look for your next home. Getting a home evaluation and using the answers provided there, can really make choosing a house a lot easier.
There are several expenses that vary depending on whether you bought your home with a fixed-rate mortgage or an adjustable rate mortgage (ARM). Fixed-rate mortgages come with a set interest rate, while ARM mortgages come with flexible interest rates that go up as much as five percent per year. This five percent jump in interest rate can make a big difference when it comes to expenses. On the positive side, if interest rates stay at their current level, you will pay less in interest payments. The downside is that these payments will not cover the full cost of the home.
Another type of mortgage is known as an FHA mortgage. An FHA mortgage is a government insured mortgage that has been backed by the FDIC. If your mortgage falls into foreclosure, the FDIC takes over the responsibility of re-financing the loan through the US Treasury Department. This allows homebuyers to receive assistance if they need a bailout for their mortgage.
Another aspect of homeowners insurance that you should be aware of is your flood insurance protection. In the event that your home is flooded, your insurance will help pay for any additional expenses related to repairing water damage. It is important to have this coverage in addition to your mortgage and it is recommended to get extra coverage to cover your personal belongings. Personal belongings will include any furniture, electronics, jewelry and appliances.
Homeowners insurance policies also vary depending on what is being replaced. Appliances, electronics and furniture usually have replacement value. You can expect the insurance policy to be more expensive if you are replacing items such as a fireplace or flooring than it would be replacing your appliances. If you will be entertaining on a regular basis, it may be worth it to get an extra insurance policy that covers your entertaining equipment.
Another aspect of homeowners insurance that many people overlook is liability insurance. It is wise to purchase this type of insurance to protect your belongings and yourself against any lawsuits that may arise as a result of property damage or injury. Many homeowners’ insurance policies do not cover damages caused by flooding or fire. If you have significant items that are valuable, you may want to consider purchasing additional insurance coverage to ensure that they are covered.
Preparing for expenses as a new homeowner involves making sure you have adequate coverage to repair or replace property if it is damaged. If you are planning to purchase insurance, be sure to research all of your options to ensure that you get the best price. Your homeowner’s insurance can make owning your home much more affordable but if you prepare for your purchase and insure properly, you can be assured that you will be covered in the case of many unfortunate circumstances.