More Information

Homeowner Tips: How to Balance Your Finances after Closing

Financial advisors coax first-time buyers to give up avocado toast and cut the cable to afford a down payment on a pricey Denver-area home. But if you sold an existing home to afford a step-up luxury home, the last thing you want to think about is sacrificing or saving. When it comes to home owner tips: how to balance your finances after closing on a home, get back to the basics. Spending less and earning more without adversely affecting your lifestyle are the two main paths to a balanced new home budget. According to an article by The Motley Fool, there are numerous costs associated with home ownership. After buying a Denver area home, the first step is to devise a new budget for the new expenses. Depending if you downsized or up-sized in terms of square footage, your utility costs will change for the positive or negative. Wait for the first month bills to roll in before you create the budget.

Save money for unexpected expenses. New appliances like refrigerators, washers and dryers or hot water heaters can be costly.

Putting aside money for maintenance

In addition to listing your new mortgage costs and utility bills, put aside money each month for maintenance on your new home. Experts suggest saving 1 to 4 percent of your purchase price. Put the money in a specific account or use a designated no-interest credit card specifically for home maintenance. Some home owner expenses include lawn care, appliance repair, the purchase of steam cleaners, mowers, lawn tools and pressure washers.

Keeping money in savings for higher property taxes

Your property taxes will fluctuate depending on the housing market. When housing values drop, property taxes often go down as well. At this time, housing prices in Denver and surrounding areas continue to reach new heights. Put aside extra money for any added property tax liability. If you decide to use your home as an investment property, you will likely owe more since there is no homestead tax break on investment properties. If you have a fixed rate mortgage, you won’t have to worry about other fluctuations in your mortgage payment. However, people with adjustable rate mortgages need to stay on top of the latest interest rates and timeline for their rate increase, which is typically after 5 years.

Before undergoing any massive home renovation project, get used to your new monthly budget for at least 1 or 2 years. Consider which renovations projects provide the greatest return on investment. Talk to a real estate agent specializing in the hot Denver neighborhoods to update you on the latest trends so you get the most bang for your buck when it’s time to sell.

At The Principal Team, we help home buyers find houses in wonderful neighborhoods in towns that include Littleton, Lone Tree, Highlands Ranch, Castle Rock and Greenwood Village. If you like small town living, talk to us about homes in Louisville, Golden and other tight-knit areas ideal for raising families or retiring. For more homeowner tips on how to balance your finances please contact us.

Comments are closed.