As a first-time home buyer, you're likely looking primarily at your mortgage when planning your home's investment. However, there are several new home expenses that are likely to surprise you and add a lot of money to your investment. Understanding these investments (and how to lower their costs) can help you better budget for your new home.
New homes are going to require insurance and this investment usually adds nearly $100 a month to your bills. Currently, the average homeowner's insurance cost across the nation is about $952 per year. However, it can drop as low as $934 (in Hawaii) and as high as $1,991 (in Florida).
Thankfully, it's possible to lower your insurance rates by:
- Preparing for a disaster (such as cutting away dangerous limbs)
- Choosing a higher deductible (to lower monthly payments)
- Asking about first-time owner discounts or loyalty discounts
Furnishing Your Home
Many people buying new homes think that they'll be able to simply furnish their home with what is available in their apartment. Unfortunately, that's not likely going to be the case. At most, an apartment of furniture is likely to provide decoration for one or two rooms. And that means you need to buy new furniture.
Unfortunately, this can add thousands of dollars to your investment; consider that a new bed can cost as much as $699 and a new living room almost $1,600. However, you can save a lot of money by purchasing used furniture in a high-quality thrift shop. Often, you can find sturdy furniture for as little as $20 each.
New homeowners probably have a basic idea that they will be paying some form of property tax, but few understand how expensive this can be. Having to pay annual property taxes can add several thousands of dollars to the monetary investment you need to make in your new home.
The amount you need to invest varies wildly based on the state. For example, property taxes can drop as low as $482 (in Hawaii) or as high as nearly $4,000 (in Illinois). If you live in a state with a high property tax, make sure you budget for that investment every year by setting aside a separate savings account you add money to every paycheck.
Thankfully, it's possible to lower your property taxes by getting your home value reassessed and your property taxes adjusted. There's a chance that you may be able to shield a value of your home value from being taxed, such as if your income is limited.
Hopefully, these tips have given you the guidance you need to successfully budget for your new home. If you're uncertain about this process, or need more help budgeting, please contact a professional real estate agent today to learn more.