If you are ready to purchase your first home, then you are probably also looking for ways you can save money as well. So, today, we have a few money-saving tips for first time home buyers to help make this transition in life a bit easier to manage.
As a first time homeowner, it is going to be one of the most exciting and nervewracking experiences of your life. You have managed to maintain your financial goals up until this point and are now looking for ways to continue to save as you move into your first home.
Pay Off Debt
Owning a home can come along with a lot of extra and unexpected expenses. For this reason, you want to pay off as much debt as you have and start building up an emergency fund. Owning a home comes with a lot of responsibility including the maintenance and upkeep for the property. You want to be sure you have the funds available to cover any surprise expenses so you don't have to rack up debt with loans.
You never want to be house poor when you buy your first home either. So, always make sure you can comfortably afford the house. Check your monthly budget and figure in the costs for other expenses that come along with homeownership, including HOA fees, taxes, and homeowner's insurance in addition to the mortgage amount.
Before purchasing a home, you may also want to consider saving up money for your down payment. Expect to save a down payment of at least 20 percent for the home. If you can do this, you won't have to purchase private mortgage insurance (PMI). This insurance will usually cost you around 1% of the total loan value. The PMI is added to your monthly mortgage payment.
Another tip is to set aside and save the money that will go toward closing costs. The closing costs will be in addition to the down payment. On average, the closing costs on a home will come out to be approximately 3 to 4 percent of the purchase price of the home. The closing costs will typically go toward paying for the appraisal, home inspection, credit report, attorney, and homeowner's insurance.
Think Long Term
Buying a home is a big decision and an even bigger investment. So, you want to make sure to research different neighborhoods and attend open houses before you put any offers in. You need to think more long term. Find the most affordable home in one of the best neighborhoods. This way, you will have more room to grow and build value.
To further protect your home once it is purchased, you want to make sure to have the right homeowner's insurance in place to protect your sizable investment. To do this, make sure to consult with a professional and experienced insurance agent. They can guide you through all of your homeowner's insurance options and can even help you discover a few discounts on your premiums along the way.
To get started, contact Panorama to discuss all your homeowner's insurance options so you can sit back and enjoy your home as you continue to build your future and save money.