The first 12 months of homeownership will set the tone for your entire experience, and it’s also one of the prime periods where you can make a few smart decisions that will save you money and help build your investment. And with the new year just past and resolutions abound, it’s a perfect time to take stock and see where you can tighten the belt.
At Altius Mortgage and our partners at Mortgage Ogden, we’re here to help. If you’re a first time homebuyer, here are some good New Year’s resolutions to try and stick to within this first 12 months of ownership.
You should take a close look at your homeowner’s insurance policy, as these are not one-size-fits-all and the PMI rates you pay may not reflect adequate coverage. Check the exclusions on your policy – areas that are not covered. Does the policy cover jewelry and other personal valuables? What about injury due to pets? The home is your biggest asset, so you should spend time reviewing how it’s covered.
In addition, especially if you notice that some appliances in your home are near the end of their life cycles, consider a home warranty (or service contract). This is an annual agreement that essentially functions as insurance for these appliances. Be sure to read these agreements carefully, as there’s important fine print.
Homeownership can spring up little expenses you hadn’t expected, especially during the first 12 months. Keep an emergency fund stocked for any sudden needs – this should cover several months of expenses ideally, but it’s okay to start smaller and work up each paycheck.
In most mortgage situations, you’re constantly building equity in your home as you pay off your debt. Equity refers to how much of the house is paid off, and it can be used to secure loans or other forms of financing if you build it up well enough. If you’re in a good enough financial spot, consider ways to begin paying your mortgage off faster to build your equity.
Heating and cooling are not cheap areas, and you should check to make sure you’re getting your money’s worth here. Spend time early in your homeownership checking on things like temperature between rooms or any strange smells, and if you’re even a bit concerned, consider an energy audit. This uses special measures to detect air infiltration or missing insulation in important areas, and can save you a ton in the long run on utility bills and repairs.