Buying your first home can be an overwhelming experience. It takes serious financial preparation and thorough consideration of all the factors involved. Before you look at homes in Lancaster, Cavite, for example, you must have already determined how much you can afford. Additionally, you should also look at the mortgage plan, the down payment required, as well as if you qualify for a housing loan or similar financial assistance.
Checking on your financial health is important because homeowners should protect their investments and make sure they do not get overwhelmed with other financial obligations. Keep the following things in mind.
Realign Your Budget
Most new home buyers find it daunting to plan a new budget after going through the expenses of a home purchase. Consider all the new costs of maintaining a house. You have a monthly mortgage payment, and then there are utility costs, association costs, repairs and maintenance as well. You also need to pay for the annual real property tax and fire insurance for your home and its contents.
If you have never owned a home before, repairs and maintenance costs are part of the regular expenses. Unlike renting an apartment or condominium, everything you change or repair will be from your own pocket. For a single-family home, for example, you need to set aside about 2% of the value of your property for its upkeep and maintenance every year.
Aside from these, you may also encounter larger expenses, such as having air conditioning systems or solar panels installed. That, of course, depends on how many improvements you want to add to the house. In addition, you need to consider homeowners association dues as well, especially if you are buying a property in a planned development with shared spaces and facilities.
Review Your Financial Plan
Your budget will change and increase once you have become a homeowner, and that is why it is important to plan your financial goals. Make sure that you still have savings for your retirement or can still afford to pay premiums on insurances and pension plans. For some, saving for an emergency fund or the children’s college fund is also part of their financial plan.
This can be a struggle for many Filipino families who are new homeowners, however. This is why many financial experts suggest investing in a smaller and more affordable home if you are a first-time home buyer. This applies to newlyweds, small families or individuals who just want to invest in real estate.
Having a budget is a good idea, but you should also track where your money goes so that you will know how many you can budget. Saving after buying a home is still possible; you only need to review your whole financial situation and plan it out properly.
So, before you even begin scouting for a house, make sure that you have already considered all the financial aspects of home ownership. Be as realistic as possible by assessing your own finances and determining what you can really afford in a home.