| You've
done it. You've bought a home and now own part of The Dream. In the
process you've also acquired many responsibilities and concerns. There
are mortgage payments to make, records to keep and maintenance work to
complete. Below are a few tips for the new owner.
Mortgage payments
Every
month you'll receive a statement from your lender reminding you that
your mortgage payment is due, or, if you have a coupon book, you'll
have to remember to send your payment on time.
Some
lenders can automatically deduct monthly payments from your checking
account. This saves time and postage costs. It can also prevent the
possibility of missing a payment. Ask your lender about this service.
Furnishing and renovating
You've
just moved in. Most of your belongings are still in boxes. But you've
decided the first thing you want to do is redo the first-floor
bathroom, buy new furniture for the living room and strip the wallpaper
from every wall in the house.
Stop. Put your hands in your pockets, seal your wallet, tie yourself to a chair. Don't do anything major right away.
Acquiring
a home requires some adjustment. Your mortgage payment may be higher
than the rent you've been paying, so give yourself time to get used to
the new cash regimen. Too many new buyers realize too late that they
had no idea how much it costs to run a home.
The
message here is simple common sense. Go for a slow, smooth transition.
You'll probably be living in this house for a good while; don't try to
do everything at once, even if you can afford it.
Papers to keep
Keep
a copy of every document you signed at the closing. It's especially
important to keep a copy of your settlement form. It will be useful
when you file taxes and if you sell your home. For example, the real
estate taxes and loan discount points you paid as part of your closing
costs are tax deductible. So, when you file taxes, refer to the
settlement form to get these amounts.
In
addition to the closing documents, keep all insurance records, such as
homeowners and title insurance. You would need to have access to your
homeowners policy if, for example, someone were to sue you because they
were injured on your property. You would refer to your title insurance
policy if you were to find a flaw in the title after you bought the
house.
It's
a good idea to keep these important records in a safe place. You may
want to store them in a safety deposit box or a bank vault in addition
to keeping a copy at home.
Home maintenance
Your
mortgage requires you adequately maintain your property and not allow
it to deteriorate. As a homeowner, you can't afford to sit back and
postpone maintenance. You can extend the life of appliances and
fixtures and avoid expensive repairs by performing routine maintenance
yourself.
It's
a good idea to set up a budget for your home's regular maintenance and
unexpected repairs. You may want to budget 1 percent of the purchase
price of your house to cover annual maintenance and repairs. You also
may want to stick to a regular savings plan to cover essential bills,
emergency repairs and large, periodic expenses such as property taxes
and homeowners insurance.
|
