The New Homeowner’s Guide: Learn Essential Tips and What to Expect

Buying a new home is a significant and exciting life decision and process. It may seem that once you’ve submitted your down payment, you can begin to see the light at the end of the purchasing tunnel. However, there’s more to homeownership than making your monthly mortgage payments.

Learning about other costs you may encounter, common homebuyer mistakes and potential payment assistance programs can ensure you have all the tools you need in your home-buying toolkit. MoneyGeek's guide walks you through the new homeowner's checklist to help make your purchasing process as smooth as possible.

Many people focus on whether to rent or buy a house for a while before deciding on one option. When choosing to purchase your first home, there are various factors you need to consider — and they go beyond coming up with the down payment.

After you complete the closing process, you must think of many things. These may include updating your address, changing the locks and ensuring your house is clean before you move in.

Owning a home requires a lot of effort. Some of it begins as soon as you purchase your home. These include checking your security system and preparing it for your move-in date.

Then others last well beyond after you and your family have settled in. After all, you will need to maintain your home.

MoneyGeek's guide highlights several must-do steps in your new homeowner's checklist. Ensuring these are in place can make your move more efficient.

Unless something dire happens, you're unlikely to change door locks even after several years. However, there are some things that, as a homeowner, you would want to check at least once a year.

Like all things, your home will need maintenance — it is subject to wear and tear. You'll find small fixer-uppers here and there, but it usually costs you less if you spot them early.

The median sale price for houses is $454,900 as of the end of Q3 2022. Without question, purchasing a home requires thought because it will impact your finances significantly.

However, there's more to it than applying for a mortgage and coming up with the down payment. First-time homebuyers usually experience financial stress because they aren't aware of the hidden costs of owning a home.

To help you avoid this, we've broken these down into purchasing expenses and monthly costs. We also explored those connected to maintenance, home repairs and remodeling.

Homeownership costs begin with one-time expenses. As the name implies, these are expenditures that you only encounter once. After paying for these, you usually only experience them again if you purchase or move into another house.

It's easy to think you can rest easy once you've moved in. However, there are monthly expenses that you must consider. Remember, you'll have to spend on these as long as you live in this house. That means you must ensure you build it into your household budget.

Everything undergoes wear and tear, including your home. Remember, you don't need something to break down before paying attention to it. Investing in maintenance is an excellent strategy to avoid more expenses. To be safe, set aside 1–4% of your home's value each year for maintenance costs.

Things will eventually start breaking down, even if you do routine maintenance. A leaky faucet may not be so bad on your finances, but a foundation repair is entirely different.

You may eventually want to have some areas of your house remodeled. It's a great way to increase your home's value, but remember that these may be costly.

HomeLight's 2022 Buyer and Seller Insight Report found that 69% of new homebuyers used a mortgage to purchase their home. It's an excellent way to help finance your home purchase, but it also means ensuring you have the means to make your monthly dues until you've repaid your loan.

MoneyGeek's guide provides tips to homeowners about paying their mortgage, understanding the factors affecting the amount and exploring programs that could help you with your expenses.

Your first mortgage payment typically depends on your closing date.

Closing towards the end of the month gives you about 30 days to prepare for your first payment. However, closing early in the following month provides you with more time. For example, if you close on May 28, your first payment is due around early July. However, if you close on June 3, your first payment will be due in early August.

Regardless of your closing date, you'll pay the same amount. However, the more time you have until your first payment, the higher your closing costs are.

Afterward, you'll pay your monthly amortization on the same day each month. Setting up automatic payments is an excellent strategy to avoid missing them and incurring late fees and other penalties.

Lenders consider several factors when calculating your monthly due, such as the following:

Fixed-rate loans assure you that your monthly due remains constant for the life of your loan. MoneyGeek's mortgage calculator can give you an estimate of your monthly due.

Variable-interest loans have lower rates but are affected by market conditions. If your lender increases interest rates, your monthly due also becomes higher.

Purchasing a home is a significant financial obligation. Although mortgage payments aren't the highest contributor to homeowner costs, it still accounts for 30% of expenses.

Most people have 30-year mortgages, which may become challenging to manage over time. Fortunately, you can find financial assistance or programs to help you.

Purchasing your first home is an adventure, and you're likely to be more excited about starting home improvement projects or looking for ways to improve your forever home. Be careful not to take on too much. As a new homebuyer, you may make some financial mistakes that could affect your bottom line.

Owning and maintaining a home is a considerable financial commitment. Besides providing new homeowner financial tips, MoneyGeek also included a list of resources that may make homeownership less overwhelming.

Checklist

• The Only Moving Checklist You’ll Ever Need: Moving from one location to another can be stressful. This checklist helps you put things in order and prevent anything from falling through the cracks.

Calculators

• Budget Calculator: It’s crucial to know where your money’s going and ensure you have enough funds set aside for monthly or maintenance costs. This calculator incorporates various expenses, from housing, transportation, debts and loan payments, among other things.
• Estimator Tool: This online tool helps estimate expenses for a remodeling project, paint job or window and door replacements. You can even calculate the potential cost based on the hourly rates of various contractors.
• Home Maintenance Calculator: Figure out possible home maintenance costs based on the age of your home and appliances.
• Remodeling Calculator: Figure out how much money your renovation can cost. You can use different parameters to help you get a more accurate estimate.

Financial Assistance Programs

• First Home Club: The Federal Home Loan Bank of New York offers a matched savings plan to help first-time buyers purchase a home. Read about the eligibility requirements and see if they apply to you.
• Freddie Mac Home Possible: Freddie Mac’s mortgage option offers flexible requirements. You may want to consider it if you’re looking for financial assistance.
• Help Buying a New Home: USA.gov shares a list of programs you can explore to help you purchase a home. Check if you qualify for some of them.

Service Providers

• FMCSA-Registered Movers: Unless you’re planning to haul your belongings to your new home yourself, you’re likely to hire movers to do it for you. You can use this site to find approved movers, especially if traveling from one state to another.
• Home Guide (Landscapers Near Me): Each landscaping company has something different to offer. Use Home Guide to find several service providers in your area so you can make a comparison.
• PestWorld: Pest control is an essential part of maintaining your home. Find an exterminator near you through PestWorld’s database.