Becoming a first-time homeowner is a huge accomplishment that you should be proud of achieving. A new home opens the door to new possibilities and memories. It will be an exciting time in your life, but it can become overwhelming.
To limit the amount of stress and confusion you may feel, be sure to learn what it takes to become a homeowner and review first time homeowner tips.
When you are prepared and know what to expect, your move goes more smoothly and cuts down on mistakes. When we’re excited or anxious, we tend to make decisions that we wouldn’t typically make if we were cool, calm, and collected.
To learn more about how you can make the best financial decisions, protect your new home, and maintain your home after you have moved in, continue reading below.
The Basics of Homeowners Insurance
Once your dream is within reach, you will want to protect it.
When you first decide to purchase a new home, you might not think about a homeowner’s insurance policy.
But the best way to keep your home safe is to obtain a homeowner’s insurance policy. Do your research to find a reliable and trustworthy agency to learn what type of policy would be best for you and your family.
A basic insurance policy will typically cover:
- The structure of your home
- Roofs, walls, carpeting, flooring, and built-in appliances
- Attached garages
- Buildings on your property
- Fences and permanently installed pools
- Personal property
- Liability protection
- Guest medical protection
- Loss of use
Disasters Covered by Homeowners Insurance
When you become a homeowner you will be responsible for any damage that occurs to your house, as well as upkeep. This is why even if you own your home, it is wise to purchase an insurance policy.
Without insurance, one small storm or accident can wipe out your savings account. Or worse, you have to take out a large loan just to cover the cost of damage.
If you finance your home, it is mandatory to buy a policy. If you cannot make repairs and keep up with payments, the bank or mortgage company you purchased your home from will not want to be held liable for the damage.
Perils that are often covered include:
- Lightning, hail, and windstorms
- Riots, vandalism and theft
- Damage caused by vehicles and aircraft
- Falling objects
- Weight of ice, snow or sleet
Homeowners Policy Add-ons
After speaking with an insurance agent, you can determine if you need more than the standard coverage. There are many options to choose from, making it easier than ever to protect your home and belongings.
While no one wants to think about damages that could occur to their home or their property being vandalized, natural disasters, accidents, and unfortunate events happen every day.
Common add-ons include:
- Sewer and drain backup
- Service line protection
- Ordinance, and law protection
- Identity theft
- High-value item coverage
- Mechanical breakdown coverage
- Personal injury
- Personal umbrella protection
Financial Tips for First Time Homeowners
The following first-time homeowner tips will help you along your journey to homeownership. You will learn how to make smart decisions and wise investments that will benefit you and your pocket in the future.
Pay off all of your debt
Moving into a new home will be expensive. Not just purchasing your home or moving costs, but the upkeep. Staying debt-free will help you in the long run when you need to spend money on maintenance or repairs.
Save for a down payment & choose the 15-year mortgage
A sizable down payment will save you a ton of money in the future and allow for a lower monthly payment. If you choose a 15-year mortgage over a 30-year mortgage, your monthly payment might be higher but you’ll save thousands of dollars in interest with a shorter loan term.
Maintain your credit
Keep a good credit score to make sure you can get the best interest rate available. The mortgage company will check your credit several times before you sign off on your new loan. Even opening a new line of credit before purchasing your home can change your score and affect your interest rate and mortgage. This is why you should do anything you need to with your credit before you’re pre-approved.
Save for closing costs
Your closing costs are not part of your down payment. You’ll need to save an additional 2-5% of your total loan cost for closing fees. These can sometimes be paid by your seller through negotiating, but you should plan to pay these costs out of pocket.
Don’t make an offer unless you are committed to the purchase
If you back out of your offer you lose the deposit you made when placing the bid. This usually adds up to about 1-3% of the total home loan value. That money could have gone instead towards closing fees for the home you purchase.
Stick to your budget
It’s easy to get caught up in a bigger house than you need, for a bigger price than your budget. Be realistic when searching for a home. Getting pre-approved will help you determine the amount you can afford.
Upkeep Tips for your First Home
Maintaining your home is essential. Not only does your house look nicer but continued maintenance will add to the home’s value if you ever want to sell in the future.
Common routine maintenance includes:
- Exterior paint touch up
- Resealing your deck
- Inspect and service HVAC regularly
- Keeping gutters clean
- Insulate water and heater pipes
- Checking smoke detectors
- Check and caulk windows when needed
- Resealing the driveway
- Sprucing up landscaping
Talk to an Expert to Protect your First Home
With the right help and advice, finding and protecting the home of your dreams can be simple.
At Frost & Remer, we value our customer’s needs and work hard to ensure they get the best protection for the best price.
To receive a free policy review and risk assessment, please reach out to one of our agents. We can discuss bundles, discounts, and specialized add-ons that may fit your unique needs.
You can also contact us if you have any immediate questions or concerns, and one of our reliable and professional agents would be glad to help you.