7 Smart Financial Tips For New Homeowners

Becoming a first time homeowner is extremely exciting and satisfying, and getting caught up in all that excitement is a wonderful feeling.  But there are important decisions to consider after the purchase of your new home that can set you up for financial success down the road.  Following these tips early in your home owning experience can save you time, money, and effort.

Don’t Overspend to Personalize Your New Home

It is tempting to fill your new home with brand new pretty furniture or take on that kitchen remodel right away, but hold off for now.  You’ve just spent most (if not all) of your savings on closing costs, a down payment, moving expenses, etc…, take some time to rebuild your savings and get used to the new expenses that come with home ownership.

Purchase a Home Warranty

There is nothing worse than moving into your new home and having to put more money into it in the first year when appliances break, or (god forbid) the water heater goes out.  There are things in your home that can and will fail without warning that are covered by home warranties.  Protecting yourself with a home warranty means you won’t have to pay out of pocket for appliances that may cost thousands of dollars.  Home warranties typically cost from $300 to $600 per year, a bargain considering the replacement cost of items covered.

Don’t Ignore Home Maintenance

One of your new expenses that come with homeownership is maintenance and repairs.  No landlord to call, it’s on you now to take care of business. Neglecting small problems will lead to bigger, costlier ones in your home over time.  

Hire Qualified Contractors

While there’s a lot a handy person can do in their home with some tools and a YouTube video, don’t make repairs that you aren’t qualified to do.  Know your limitations and hire qualified professionals.  Hire contractors with good reputations and reviews, and do your research before you hire. If you invest in quality repairs you will see a return on your investment.

Keep Receipts and Invoices for Home Improvements

When you go to sell your home having receipts for improvements made to the home not only looks good to potential buyers it helps with tax exemptions as well.  You are allowed to earn up to $250,000 tax free from the sale of your home ($500,000 for a married couple), being able to prove you have invested in improvements to your home may save you from handing too much cash over to the IRS upon the sale of your home.

Get Tax Help

As a new homeowner your taxes just got a little more complicated. Homeownership significantly changes most peoples tax situation and their eligible deductions.  You could still do your taxes yourself but investing a little money in a qualified CPA ensures that your taxes get done correctly and will maximize your refund.  

Get Properly Insured

Your mortgage company requires you to purchase a homeowner’s insurance policy on your new home, but how much coverage? What kind of deductible? Get advice and quotes from local insurance agents; they’ll be able to tell you what coverage you need for your area and they can personalize your policy to fit you and your home’s needs.  Going with a local agent is also nice when things do go wrong because they offer a more personalized experience.  Additionally you may want to consider other insurance policies such as life and disability to protect yourself and loved ones from possibly losing their home.

The freedom of homeownership also can come with significant responsibilities as well.  In the first year of owning your home it’s important to take hold of your financial situation to ensure your new investment is protected. Following these financial tips as a new homeowner will save you money and stress down the road.  Congratulations homeowner you’ve just made the best investment of your life!

Colorado Springs Real Estate - EXIT Realty Mountain View, Brandy Brown Employing Broker/Owner - We help home buyers and sellers along Colorado’s Front Range including Colorado Springs, Pueblo West, Woodland Park, Fountain, and Peyton. Please contact EXIT Realty Mountain View at 719.375.3864 to connect with one of the amazing brokers on our team.
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