Owning a home is more than just a bed of roses. Are you excited to take the reigns of your new home and battle the challenges head-on? Great! Starting with the commonly overlooked things is most worthy. Let’s get you schooled about the big mistakes that throw homeowners in the hot waters. Not reckoning the importance of home warranty plans for instance. Did you know that home insurance alone isn’t enough to protect your finances when things go south? Saying ‘No’ to home warranty plans is not the only mistake homeowners make. Curious to know what’s more on the list? Let’s check!
1. Taking the plunge and burning out your savings
Have you been tightening your belt and reserving money all your life? Putting your nest egg as a sizeable down payment on your new house is not a smart move. Of course, paying up a handsome advance rewards you with a better mortgage rate and lessens your monthly installments. However, sinking your emergency funds and not having enough savings is a bad idea. How do you plan to foot the bills on a rainy day? It is no surprise that problems show up unwelcomed. Having all your money tied in the asset leaves you penniless in times of misfortune.
Tip:
Make a sizeable down payment only when you can afford it. Do not nip your savings in the bud to pay up as an advance for a new home. Reserving cash that’s enough to sustain as long as 6 months is a good idea. Bear in the mind, that the bills keep popping like clockwork. Having decent savings is a must.
2. Not paying heed to your financial standing before investing in a pricey asset
The idea of acquiring a beautiful home that bespeaks luxury is a dream of many. Is it wise to take the plunge before assessing your finances or thinking about the nitty-gritty? Not really! Exhausting your reserved money and pulling out a big fat mortgage can be overwhelming. The joy of owning a swanky home shall turn into a nightmare in a bat’s eye.
There’s an unwritten rule most newbie homeowners are not aware of. The costs and bills of housing should not cross 28% of your take-home earnings. Purchasing a home is not the end of the road. Regardless of how frugal you choose to live, some expenses are inevitable. Think about it - can you skip paying your taxes or not foot the power bills? How would you not bring home the groceries? In a nutshell, savings funds to pay the costs of living are a must. Shelling out all your earnings on a property is foolish.
3. Settling for the first approved mortgage
There’s no denying that pulling out a mortgage is a pressing priority when making a rich investment like buying a home. Are you an impulsive shopper? Can you shell out a fortune without putting much thought into it? If yes, keep the idea of buying a new home at arm’s length. It could drown you in a world of debt.
Of course, a pre-approved mortgage is essential before clinching the deal on a property. But, doing a little window shopping first before taking out a mortgage is a good idea. Saying yes to the very first loan could deprive you of bagging in attractive rates on mortgages. Look around, do your research and swing your options before you fix on a mortgage offering the best interest. Settling on a mortgage charging you a steep interest can burn holes in your wallet.
4. Not taking a close look at the costs associated with being a homeowner
Are you aware of the ins and outs of the expenses of owning a crashpad? Settling the bills of mortgage is not an end to your expenses. The bills you have been footing all your life are still on a roll. In fact, a few extra costs could pop up here and there. For instance, paying the prices of landscaping, bearing the costs of taxes, paying for home improvements and much more.
If you have lived as a tenant, a chunk of these costs was being squared by the landlord. As an owner now, these expenses are your responsibility.
5. Ignoring paying heed to trivial problems
A leaky faucet hardly pins your brain. Little did you know that the small problem could burn a dent in your funds. The damages can amp up in a bat’s eye and the costs of repairing can leave you baffled. A small leakage can dampen the floors, wreck the walls, and damage household appliances. Also, the spike in utility bills is hard to pass.
Taking note of the damages or problems and fixing it right away is a pressing need. Worried that it might swell up your expenses? Putting some money in home warranty plans could keep your funds safe. If you are not quite schooled about the home warranty benefits, it is worth understanding that the contract bears the costs of home improvement.
Appliances and home systems will crash. Isn’t it a given? While on-time upkeeping can prolong the longevity of the home components, it will conk out sooner or later. Home warranty plans safekeeps your money when misfortune hits. For example, mending a crack in the plumbing system could burn your funds. It is a costly expense. Home warranty plans extending coverage on plumbing setups keep you clear from spending any money without giving up on the restoration works. The list of home warranty benefits is not restricted to the plumbing or the crucial home systems only. The plans offer good coverage on an array of home appliances.
6. Not serious with your credit report
When preparing for a tweetup with a mortgage lender, do you wish to be blindsided? No! Not having a clear idea of your credit score can leave you in the sixes and sevens. What’s worse? Your mortgage could be denied or the lenders can charge you a hefty rate of interest.
If your credit report is not up to the mark, think of ways to improve your score first. Clear the debts and disputes that have been striking down your credit score. Fix your credit before taking out a loan on your asset.
7. Vouching on cheap repair bids to restore faults in-home systems
Downsizing your expenses by relying on the first repair bid is not always a good idea. Saying yes to the best price when multiple repairs need to be wrapped certainly sounds economical. However, the cheapest bids don’t necessarily offer top-quality services. Isn’t it satisfying to modify home components and restore the faulty appliances with the best of professionals? Wondering that you might have to pay out riches? Not really if you are smart enough to invest in home warranty plans.
8. Slipping up the homeowner programs
Have you failed to spot programs, specifically designed for the newbie homeowners? Ignoring the perks of homeowner programs could deprive you of big savings. There is a multitude of programs that offer a cut-down in the amounts needed to pitch in as down payments and a shrink in the interests too.
Overlooking home warranty benefits could push you down a slippery slope. Homeowner programs are mostly money-saving schemes that help you buy a home without busting your budget. Home warranty plans, on the other hand, safe keeps your money when systems and appliances at home fizzle out and break down.
9. Underrating the importance of home warranty plans
Repairing the ruptured appliances and snapped home systems is burdening for homeowners. Imagine shelling out riches to get the faulty electricals restored. Using home warranty plans, you can secure an array of household systems and appliances.
From sprinklers to the HVAC, home systems wear down and conk out. Restoring the appliances and the complicated mechanical systems is pricey. Home warranty plans help you mend the items right away without being anxious about the costs.
