You’ve bought a house and you now a proud homeowner—Congratulations! It probably feels good, and it should. You have probably been through many obstacles and put a lot of time into the home buying process, and it has finally paid off.
If you think the purchasing process was time-consuming and difficult, the hard part is certainly not over! In fact, it’s just beginning. Now you have to transform your new house into a decorated and put-together home. In order be a financially happy homeowner, you must take some steps to avoid any pitfalls shortly after you’ve signed the papers.
Rebuild an emergency reserve.
Since most people clear out their emergency reserve when they buy a home, it is imperative that you replenish your emergency funds as soon as possible. You probably scraped together all of your cash to close on your home and pay closing costs. It’s a good idea to have an emergency cash reserve that is equivalent to at least three months of living expenses. This requires you to go on a financial diet and spend only what you need to.
Keep an eye on your spending.
After you’ve bought your home, things like furniture, appliances, and remodeling can really put a dent in your savings. Your housing expenses and utilities are probably more expensive too. These are reasons why you should be strict with your budget.
Refinance if interest rates fall.
After you’ve gotten into a routine of making your mortgage payments on time, you can keep an eye on interest rates. If they decrease from where they were when you took out your mortgage, you may be able to refinance your mortgage and save even more money every month. If you plan on staying in your home for a long period of time, refinancing will more than likely be a good idea.
Keep receipts of all home improvements made.
You will spend money on improving your home sooner or later. You can make improvements to increase its value, and you should keep track of what you spend for tax purposes in order to minimize the capital gain that you may owe tax on in the future.
Consider making your mortgage payments online.
Not only is it more convenient, paying online ensures that mortgage lenders will be paid on time. This is very important, as late payments can really cost you and trigger penalties. You can have your payment taken directly out of your bank account on the same day every month to the lender.
Proper planning can help you to avoid being in a bad financial position just after buying a house. Also consider getting a free home valuation report from Neighborhood IQ to find out your home’s worth shortly after closing to find out how much of an investment you have made in the big step of buying a home.