You prep for your down payment and for your monthly mortgage payment. You're probably used to paying for utilities already, so you account for those in your new monthly budget. But you may forget to account for property taxes, homeowner's insurance, closing costs, home maintenance and landscaping.
When you buy your first home there are many additional new costs that homeowners often forget to plan for, so we've outlined some of those for you below.
1. Home Repairs
It could be a broken kitchen sink, new HVAC system or damaged skirting. Sometimes the home updates and repairs don't take much time or money and sometimes they do. Many experts recommend at least 1% of your home's value should be allocated to yearly home repair and maintenance. So if your home costs around $150,000, your yearly repair and maintenance budget should be at least $1,500. To be safe, we recommend between 1-3% of your home's value.
2. Home Maintenance
Many first-time homeowners don't plan for regular home maintenance costs. So if you're a first-time homeowner, we recommend you plan for some of the following costs as you purchase your first home:
Initial landscaping costs like flowers, bushes, mulch and small trees.
Initial lawn costs like weed prevention and grass seed
Lawn maintenance tool costs like purchasing a lawn mower, weed whacker, garden hose, sprinkler, etc.
Home exterior maintenance costs like re-caulking tools, siding paint, siding cleaning, driveway repair, purchasing & cleaning gutters, etc.
Home interior maintenance costs like carpet cleaning, HVAC system cleanings and routine maintenance, air filters, etc.
This isn't an all-encompassing list, but it should help you start budgeting for home maintenance costs that come with achieving the dream of homeownership.
3. New Furniture and Décor
If you live in an apartment or rent a house smaller than the home you plan to buy, you may need to buy furniture pieces or décor to fill new rooms in your home. Sometimes apartments or rental properties come furnished. When you transition to your new space, plan for new furniture, décor and organization system costs.
4. Closing Costs
Depending on your lender and the nature of your home purchase, you could have a variety of closing costs and fees you need to budget for as you buy your first home. You could have costs such as:
Loan origination fee
Attorney fees such as
And a variety of other fees related to your closing process
Finance and budget experts estimate that total closing costs can range from 2% to 5% of your home's purchase price.
5. Moving Costs
Whether you plan to use a moving truck to transport your stuff to your new home or you plan to move stuff in your own vehicle, you'll need to plan for unexpected moving costs. Consider the build-up of many small costs like:
Renting a moving truck or trailer
Cleaning supplies as you clean up your current apartment or rental property
Moving supplies like boxes, bubble wrapping and large furniture padding
Meals for when you're not cooking because your tools and ingredients are packed away
Gas expenses for the moving process
Hotel costs if you're moving long-distance
6. Property Taxes
When planning out your new home budget, you'll need to account for property taxes. Aside from your state property tax, you may also have to pay property tax to your county, city, special district or local school district.
7. Homeowner's Insurance
Many first-time home buyers forget to plan for the cost of monthly insurance premiums. Homeowner's insurance helps you protect the major investment you're making in your new home, though. Budget for your monthly premium and rest assured that when the unexpected happens, you have insurance to help.
If you're a first-time home buyer, proper budgeting can get you ready for homeownership. As you invest in a manufactured or modular home, HomeFirst Agency could be the perfect homeowner's insurance for you and your family. Check out our insurance products to see if HomeFirst is the right fit for you and your family as you transition into homeownership.