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

Purchasing a home can be a life-changing experience. It helps to know the ins and outs of the buying process and potential hidden costs and pitfalls as a new homeowner.

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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.

What You Have to Do as a New Homeowner

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.

Things to Do After You Buy a House

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.

  • insurance2 icon

    Secure crucial documents

    You wouldn't want to misplace some paperwork, whether it's your mortgage agreement, inspection reports, insurance documents or birth certificates. Setting up your house and moving is hectic, so you're likely to lose them with all the hustle and bustle of moving in. Look for a location where you can safely store them. Better yet, purchase a fire-proof safe that can serve your purpose for the long term.

  • mortgage icon

    Change your address

    Let people, establishments and agencies know that you've moved. It ensures you'll continue to receive your mail, and your credentials will contain updated information.

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    Get to know the lay of the land

    Now is the time to go around your property and check out every nook and cranny. It's not just about knowing where the kitchen is or which door leads to the basement. You need to know where your main circuit breaker and water shut-off valve are. Doing this also serves as an inspection of your home's condition.

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    Do a deep clean

    It's always best to scrub everything down, even if your agent tells you that the construction company or previous owners already did it. Check the kitchen, bathrooms, backyard and gutter and ensure everything is in proper order.

  • paintingRoller icon

    Refresh the paint and floors

    Depending on your home's condition, you may need to repaint the walls and fix some floor panels. It's better to do it now while the house is still empty. Once your belongings are inside, it'll take more work.

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    Install your utilities

    Ensure the basics are in place: You have running water, electricity, and gas. In this day and age, you must also schedule your internet installation.

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    Change your locks

    Yes, your agent will give you all copies of the house keys. But you never know whether there are others out there. Your safety is a priority, so invest in new locks and have these installed.

Annual Maintenance Checklist

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.

  • fan icon

    Test your alarms and detectors

    It's crucial to ensure that your fire and burglar alarms and smoke detectors are working. Most of these operate on batteries and you'll eventually need to replace them.

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    Prune tree branches

    Trim tree branches so that they’re not close to your home. Not only will this prevent animals from entering your home, but it also helps you avoid heavy damage during severe weather conditions.

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    Inspect your roof

    Unlike other parts of your home, like the garage or the yard, your roof isn't something you look at closely often. However, it's best to check if any shingles are missing, cracked or need replacing.

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    Check for termites

    Whether you notice wood damage or not, it's best to ensure you don't have termites. The worst thing that could happen is you find out too late. An infestation may already be well underway and could be challenging to manage.

Getting Your Mail Delivered to Your New Home

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Sometimes, we take for granted that people know where we live. You only realize you need to notify multiple people, providers and agencies about your change of address when you're moving.

The following are some of the top essentials to update:

  • The Post Office should be your first stop. Visit a USPS branch or set up a forwarding address online, so they'll automatically deliver your mail to your new address.
  • Government agencies like the IRS, Social Security Administration and Veteran Affairs, among others.
  • Providers for utilities and insurance.
  • Banks and other financial institutions.
  • Memberships and subscriptions (like streaming services).

An illustration of a new homeowner learning the true costs of homeownership.

The True Costs of Homeownership

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.

Home Buying Costs

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.

  • Types of Cost
    How Much Does It Cost?
    What Is It For?
  • Down payment

    This is typically 3–20% of the selling
    price, depending on the type of loan
    you take out.

    The down payment is a payment
    you make upfront when you
    purchase a home. The higher it is,
    the more home equity you have. A
    higher down payment also means a
    lower monthly due for your
    mortgage.

  • Closing costs

    The amount you spend on closing
    costs varies, but these usually range
    between 2–5% of your home's
    selling price.

    Closing costs cover all the fees your
    lender or any third-party charges for
    their services during the
    home-buying process. These may
    include payment for home
    inspection and appraisal.

  • Moving costs

    Anywhere between $1,128–9,060,
    depending on the extent of the
    moving services you procure.

    You can move all your belongings
    on your own or rent a van or storage
    container. Full service costs the
    most but is the most convenient —
    the movers pack everything up,
    transport it, and set it up in your new
    home.

Make Moving Costs More Manageable

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There are many upfront expenses when you purchase a home, especially when it involves moving from one location to another. Many new homeowners look for tips to help them reduce these. Here are some strategies to consider:

  • Declutter: Do you need to bring everything you have now to your new home? The fewer things you need to transport, the more affordable moving services become.
  • Compare moving companies: Movers charge different rates, so getting estimates from several before deciding which one to use before deciding on one.
  • Schedule your move on off-peak seasons: Rates usually drop between May to September, so if you can time your purchase around that time, you may spend less on moving costs.

Monthly Costs

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.

  • Types of Cost
    How Much Does It Cost?
    What Is It For?
  • Mortgage
    payments

    Your monthly payment depends on
    your loan amount, interest rate and
    terms. It’s best to know the amount
    before you sign your mortgage
    agreement.

    Your mortgage payment is applied
    to your home loan. Based on your
    loan terms, you will pay monthly
    installments for 15–30 years until
    the home loan terms are satisfied.
    Your payment typically includes
    interest, insurance payments and
    property taxes.

  • Insurance
    premiums

    Homeowner insurance costs an
    average of $1,979 per year, while
    car insurance comes to $1,424
    annually. Remember that your
    premiums may vary based on your
    profile.

    Whether it's homeowners, flood or
    car insurance, having coverage is
    always an excellent financial
    management strategy. It protects
    you against costs from unexpected
    damages.

  • Utilities

    The cost of utilities varies, but two
    factors affect it — property size and
    consumption. Generally, the bigger
    your home, the more expensive your
    bills become.

    Water, electricity, gas and sewer are
    staples in any household. Keeping
    these expenses covered ensures
    that you and your family can
    continue your daily routine without
    interruptions.

  • Property taxes

    The tax rate for each county is
    different, so it's best to know this to
    determine your property tax.
    Remember, it's different from your
    monthly mortgage amortization.

    You will need to pay property tax as
    long as you live in your home.
    However, you can't assume that the
    amount remains the same annually.
    When your home's value increases,
    so does your property tax.

Manage Your Monthly Mortgage Payment

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Some costs require attention each month. One of these is your monthly payment for your mortgage. MoneyGeek's financial tips for new homeowners can help you better manage it.

  • Put in a higher down payment: A higher down payment reduces the amount you have to borrow. In turn, a smaller loan amount results in more affordable mortgage payments.
  • Establish a household budget: Understanding your spending habits can help you determine which areas that require adjusting. Remember, your mortgage is one of your primary monthly payments, so ensure you have enough set aside.
  • Set up automatic payments: Missed or late payments often result in penalties and fees, which add to your expenses. It also pulls your credit score down, affecting other financial areas, such as insurance premiums.

Maintenance Costs

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.

  • Types of Cost
    How Much Does It Cost?
    What Is It For?
  • Deep cleaning

    Expect to spend between $200–400
    for professional deep cleaning
    services. The rate varies depending
    on the size of your home and your
    location.

    Deep cleaning goes beyond wiping
    your table and shelves and
    mopping the floor. This cleaning
    service ensures that every inch of
    your home gets proper attention —
    even the space beneath the couch
    that's challenging to reach.

  • Pest prevention

    Ensuring your home remains pest
    free can be as low as $50 or as
    high as $8,000 but generally
    averages between $200–600.

    Whether you need lice removal or
    termite fumigation, ensuring your
    home is free from unwanted guests
    is always a worthwhile investment.
    Pests can cause significant damage
    to your home, which leads to more
    expensive repair costs if you don't
    catch it early.

  • Landscaping or
    lawncare

    It's best to keep your lawn from
    becoming overrun. It'll cost around
    $100–200 per month.

    A well-manicured lawn adds to your
    home's curb appeal because it's
    one of the first things guests see.
    Besides these, a poorly-maintained
    one can also attract insects and
    hide hazards that might harm you
    or your kids.

  • Pool care

    Not everyone has a pool in their
    home. But if you do, prepare to
    spend around $80–150 per month
    for maintenance.

    A pool is a luxury that comes with
    additional costs. Besides the
    maintenance, it may also affect
    your water and electricity usage.
    However, a dirty pool can be a
    breeding ground for parasites,
    bacteria and mold. It may even
    cause recreational water illnesses.

Financial Tips for New Homeowners to Reduce Maintenance Costs

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They always say prevention is better than cure. This applies to your home, too. Regular maintenance can help you prevent extensive damage in the future, but it can quickly increase your expenses. Here are some strategies to shave off some dollars:

  • Don't skip it: Yes, maintenance adds to your workload, but it'll allow you to catch things sooner rather than later. It could help you avoid a more expensive repair later on.
  • Do it yourself: You don't need to hire professionals for all maintenance activities. If the task isn't complicated, you can try to do it on your own. It may require more effort, but it'll cost you less.
  • Choose your providers carefully: Rates vary between service providers, so it's crucial to compare what they offer before deciding on one.
  • Build relationships: You'll eventually find providers you prefer, and you may decide to use their services regularly. The more you work with them, the better your chances of striking a deal or getting a discount.

Home Repairs and Remodeling 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.

  • Types of Cost
    How Much Does It Cost?
    What Is It For?
  • Foundation
    repair

    Homeowners spend an average of
    $4,500 to get their home's
    foundation repaired, but costs can
    range from $2,000–7,500.

    When your home's foundation is
    damaged, you may have to repair
    cracks, bowed walls and leaks. You
    may also experience settling and
    settling, which you need to address
    before it could cause more
    extensive damage.

  • Roof repair or
    replacement

    You'll spend around $1,000 to get
    your roof repaired. However, your
    expenses may vary depending on
    the extent of damage and
    replacement.

    Repairing damages to your roof can
    go a long way to prevent a
    replacement, which costs
    thousands of dollars. Roof repairs
    cover fixing small leaks or replacing
    shingles or other roofing materials.

  • Water damage
    repair

    Restoration due to water damage
    can cost an average of $3,314. The
    amount varies depending on the
    type of water, class of water
    damage and the area of the house
    where it happened.

    Restoration services cover water
    damage from leaky faucets, burst
    pipes, overflowing appliances or
    toilets or floods. And these aren't
    limited to your kitchen or bathroom
    — it extends to your basement and
    drywall. Leaving it unattended may
    result in something worse, like
    mold.

  • Mold removal
    and remediation

    It can cost anywhere between
    $500–30,000. It'll depend on
    whether the mold is isolated in a
    specific area or has spread.

    Mold removal and remediation
    involve isolating infected areas,
    ventilating your home and removing
    the moldy material. Services also
    include disinfecting your home and
    replacing the material.

  • Remodeling and
    renovation costs

    You might have to shell out $16,000
    to over hundreds of thousands of
    dollars for a home renovation. It
    depends on the size of your home
    and the extent of your renovation.

    Basic remodeling involves aesthetic
    upgrades and minor repairs. It also
    includes some lighting and floor
    replacement, which can be
    affordable. However, if you want to
    get modern HVAC, plumbing or
    electrical systems, it'll cost you
    more. Major remodeling may also
    mean changing your home's layout.

Strategies to Lower Renovation Costs

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Renovating your home is an excellent idea. It increases your home's value and may save you money in the long run (think energy efficiency). However, whether it's a minor project or an extensive one, you'll need to shell out some money. Here are some tips for new homeowners to help keep costs under control.

  • Have a budget and stick to it: Starting with an upper limit can help you decide on the kind of renovation you want to undertake. It'll also direct choices when it comes to materials and purchases.
  • Do some of the tasks yourself: Don't leave everything to your contractors. You can do the demolition work yourself and pick up the materials.
  • Reuse and repurpose: There might be fixtures that you want to remove, but see if you can use them for something else. This way, you will only have to purchase new items for some things.
  • Watch out for deals: If you want to replace furniture or appliances, wait for a sale before purchasing new ones.

An illustration of a new homeowner learning the best time and strategy to pay off their mortgage.

Paying Off Your Mortgage

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.

When Should You Pay Your First Mortgage?

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.

Factors Affecting Your Mortgage Payment

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


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Your credit score
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Your home's location
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Loan amount
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Repayment terms
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Your down payment
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Type of interest rate

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.

New Homeowner Mortgage Assistance

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.

  • homeInsurance icon

    LIFT Act of 2021

    The Department of Housing and Urban Development sponsors low fixed-rate mortgages with 20-year loan terms. However, to qualify for it, you must meet the following criteria:

    • Must be a first-time, first-generation homebuyer
    • Income must not exceed 120% of the median income of your area

    The program allows new homebuyers to build equity twice as fast while roughly paying the same monthly amount as you would with a 30-year mortgage.

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    National Homebuyers Fund (NHF) Down Payment Assistance

    Remember, the higher your down payment is, the more manageable your monthly due becomes. Homeowners strapped for funds can avail of the NHF's down payment assistance to help with upfront costs.

    You can get as much as 5% of the mortgage loan amount, which you can use to cover your down payment or closing costs. Although the NHF considers your FICO score and DTI ratio, its requirements are more flexible than traditional lenders.

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    Government-Backed Loans

    Instead of borrowing from private lenders, you can consider those the federal government offers. Examples of these are as follows:

    • FHA Loans: Only requires a down payment of 3.5% if your credit score is 580 or higher. Borrowers with lower FICO scores must come up with a 10% down payment.
    • VA Loans: Best for veterans, surviving spouses and active military members. You can get lower interest rates and won't have to pay a down payment.
    • USDA Loans: This government home loan works best for homebuyers with low to moderate income from rural areas. It doesn't require a down payment, nor has a minimum credit score requirement.

    These could be better mortgage options compared to traditional ones.

An illustration of a new homeowner learning mistakes they need to avoid.

4 Mistakes New Homeowners Should Avoid

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.

1

Not budgeting for costs outside your mortgage

Yes, your monthly mortgage payments are crucial, but they shouldn't be your only focus. Owning a home comes with other expenses, such as paying your property tax or getting a homeowners insurance policy.

2

Starting too many home improvement projects

The beauty of having your own home is you're free to make improvements as you see fit. Remember each project you undertake adds costs to your household budget. Having too many may eat into your mortgage payments or savings.

3

Deprioritizing regular maintenance

It's easy to say you'll deal with seemingly insignificant damages later, but the longer you wait, the more extensive they become. Doing routine maintenance (and acting accordingly) can help you save money in the long run.

4

Making multiple significant life changes at the same time

You must consider the timing when you purchase a home because it's a considerable commitment. For example, if you plan to make a career shift, wait to do it until after you've bought a house.

Expert Insight on What to Expect as a New Homeowner

Industry leaders and subject matter experts are excellent sources of tips for new homeowners. MoneyGeek reached out to several and asked them to provide their insights.

  1. After paying the closing costs, most homeowners mostly focus on paying for their mortgage, insurance and property taxes. What costs do new homeowners usually forget about?
  2. What challenges do first-time homeowners usually encounter but don’t anticipate?
  3. What advice can you give new homeowners to make their move less stressful?
Brendan Kennealey
Brendan Kennealey

Founder and CEO of NESTER

Jennifer Spinelli
Jennifer Spinelli

Founder & CEO of Watson Buys

Michael Sullivan
Michael Sullivan

Personal Financial Consultant at Take Charge America

Resources for New Homeowners

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

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.

About the Author


Nathan Paulus headshot

Nathan Paulus is the director of content marketing at MoneyGeek. Nathan has been creating content for nearly 10 years and is particularly engaged in personal finance, investing, and property management. He holds a B.A. in English from the University of St. Thomas Houston.


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