Integrated Family Community Services 3370 South Irving Street, Englewood, CO 80110-1816 Ph: 303-789-0501

First Time Home Owner’s Success Guide

Congratulations! After months of planning and saving, you finally have your found first home. However, once the initial excitement wears off, you might be left wondering what to do next.

Not only is this overwhelming, but it can send you into a state of panic. But don’t worry. We’ve compiled a few tips that every first time home buyer should know!

Pay Off Any Outstanding Debt

Owning a house does not come cheap. In fact, it’s usually more expensive than renting an apartment. Due to the fact that you’re responsible for everything including maintenance, bills and upkeep costs, it’s important to set aside enough money to cover all of your monthly expenses. So, before you start redecorating your new home, make certain that you have no outstanding debt. When you meet with your loan office this debt will limit your purchasing power. You don’t want to miss out on the opportunity to get a better home because of a debt you’re close to paying off or a last minute purchase buy.

Figure Out How Much You Can Afford

Before you dive into the internet and fall in love with the first house that catches your eye, take a look at your monthly budget to find out how much you can afford. You won’t have a house for long if you have can’t pay for all of your other expenses. Make sure that your monthly house costs such as taxes, homeowners insurance and HOA fees won’t exceed any more than 25 percent. Once you finalize your home loan, make sure you have a prep kit ready in case you need it. This should include all of your home’s paperwork and a list of emergency home repair numbers for easy access.

Save for a Down Payment

If you’re not able to save up for the total cost of your desired house, consider saving for a down payment of at least 5 percent. Having a down payment to put down ensures that you won’t have to pay for private mortgage insurance (PMI). This insurance is what protects your mortgage company in case you’re unable to make any payments and have a foreclosure. PMI typically costs you about one percent of your total loan value, which is added to your monthly payments. However, most Americans don’t have 20 percent to put down in a down payment. Talk to your loan officer to see if there are any down payment assistance programs you qualify for.You may be surprised what is available.

Save for the Closing Costs

As you pay the down payment, you also need to have money available for the closing cost. Closing costs are simply the fees that are paid during the closing of a real estate transaction. Most first-time homebuyers often wonder how much it is to close on a home. The cost is usually about three to four percent of the price of your house.

The House is your Responsibility

Congratulations! Becoming a new home owner may be something to get used to. Make sure you have plenty of extra copies of your home as you are your own landlord. Consider having an emergency fund if you opt out of a home owners insurance. There is no maintenance person like in a rental. You’ll be responsible for hiring a plumber, roofer, handyman, etc. These expenses are never planned, so set some money aside every month for a home repair budget.

Buying your first time is something you will never forget. Make the moment as memorable as possible by planning ahead and being prepared for unexpected surprises. There are plenty of memories to be had in your new home. Enjoy the journey.

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Integrated Family Community Services is a 501(c)(3) non-profit organization.

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IFCS’ Tax ID # 84-0579740