Are you just moving into your first home? You need to know several things to ensure your first home is full of luxury and financial freedom. Here are some useful tips you should know:
Do Not Overspend On Remodeling And Furniture
After buying a house, you will have handed over a fortune for closing costs, down payment, and moving costs. This could deplete your savings, leaving you with very little to survive on. You might feel tempted to personalize your home by upgrading your furniture or doing a few remodeling projects.
If you have a little money to spare, you should buy a few items. However, do not go on a massive spending spree and jeopardize your new status as a homeowner. You need to allow yourself time to get used to the expenses that come with being a homeowner.
Hire Qualified Contractors
Most new homeowners try to save money by doing repairs they are not qualified to do. Your home is an investment, which means you should give it the same level of attention you give to other valuable items. Although there is nothing wrong with painting your walls, make sure you know what you are doing.
Keep Home Improvement Receipts
When you decide to sell your home, you can use your home improvement receipts to increase your home’s basis. Once you move into your new home, improvements are far off but you should remember to keep your receipts.
Do Not Confuse Improvement With Repair
When determining your home’s basis, not all expenses will be treated equally. According to the IRS, repairs are part of being a homeowner as they help preserve home’s original value. However, this is not usually true especially if you buy an old home that needs many repairs to improve its value.
The IRS will not care, as you will have obtained the home at a discount because of these unmade repairs. It is improvements such as adding central air conditioning and fixing the roof that will lower your future tax bill when you want to sell your home. Do not trick yourself into spending money on something that is not necessary.
Do Not Ignore Important Items
One of the expenses that accompany homeownership is repairs. Now that you have your own home, you cannot call the landlord whenever your roof or toilet starts leaking. Although you need to exercise restraint when it comes to buying non-essential items, do not neglect problems that put you in danger of losing your home. Moreover, according to PlumbingFix, overlooking problems could make them much bigger as time goes on.
Your mortgage lender requires you to purchase homeowners insurance that is enough to replace the home even in the event of a total loss. However, this is not the only insurance you need as a homeowner. If you are sharing the house with a person who is financially dependent on you, you need him/her named as a beneficiary in your life insurance to make sure he/she does not lose the house if you die suddenly.
In the event of a lawsuit, homeowners have more to lose – so you need to make sure you have sufficient car insurance coverage. If you get in a car accident and you are required to pay for the damage but your car insurance covers only half of it, you could lose your property.