Buying a home is an exciting thing, but many new homeowners aren’t prepared for the way their finances change after a home purchase. However, with a little planning and some budgeting tips, you can buy the home of your dreams without worry. Read on to learn all about how your budget changes when you own a home.
A Home Repair Fund is a Must
While you were renting your home or apartment, you had a landlord to call if you had a leaky roof, a dripping faucet or a broken refrigerator. However, when you own your home, you are responsible for making repairs, big and small. As a homeowner, it is a good idea to allocate some of your monthly budget to a home repair fund, so that you are financially prepared if you must call a plumber for a burst pipe or have your roof repaired after an unexpected storm.
Prepare to Spend More on Utilities
When you rent your home, it is common for utilities like water, trash pickup, electricity and even internet and cable to be at least partially covered by your rent payment. Even if they aren’t covered by rent, your utility expenses are usually relatively small in a rental situation. However, when you’re making a budget for your new home, it is important to remember that these costs are no longer built into your monthly payment, and they may be higher than you expect. It certainly takes more energy to heat a large home than it does a small apartment, and you may be billed for things you didn’t count on like recycling removal or homeowner association dues. When making your budget for your new home, it’s important to take these things into consideration so you always have enough cash on hand to pay your bills.
Owning a Home Changes Your Taxes
Homeowners, especially first-time homeowners, will notice significant differences in their taxes once they have purchased a home. Homeowners can deduct their mortgage interest from their taxable income, and enjoy many other tax breaks that those who rent their homes don’t get. These benefits include:
- Standard mortgage deduction
- Closing cost deduction on your first year of home ownership
- Property tax deduction
- And others!
These tax breaks can have a huge impact on your budget and can save you money at tax time each year. Learn about how the NC Housing Finance Agency can help make home ownership affordable for you..
