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Financially Preparing for Homeownership

Becoming a homeowner will no doubt have a significant impact on your financial situation. Your mortgage may or may not be higher than your current rent, but you will also have to pay for homeowners insurance, property taxes, maintenance, and other costs like homeowners association dues if you are purchasing a condo or townhouse.

Additionally, some utilities may increase if your new home is bigger than where you currently live. On top of all that, you may have some one-time expenses associated with establishing a new residence. Common ones include moving costs, utility deposits, and furnishings. In many communities, new homeowners also have to pay a supplemental tax bill. Legally, your home tax's value changes with ownership, but sometimes the assessor's office can prolong the change as it calculates the new value and taxes. When they do, you have to pay the difference between what you paid previously based on the old value and what you should have paid based on the new value.

The first year is often the most challenging, but rest assured, creating and following a financial plan can help you can tackle all of your new expenses successfully without having to depend on credit (a short-term solution that only costs you money and makes it more difficult to pay your bills in the future).

Next Topic Adjust for Tax Benefits