Finding and purchasing your home can be exciting — and overwhelming. You may be relieved once you finally take possession of your new house but be aware that the financial responsibilities of home ownership are just beginning. So the real question is there more to Home Buying?
Make Your Mortgage Payments on Time
Whether monthly, biweekly or weekly, be sure that you always make your mortgage payments on time. Making late payments (delinquency) may result in late charges and negatively affect your credit rating. Failing to make payments can even lead to more serious consequences like foreclosure.
A good way to prevent late payments is to have the amount automatically deducted from your account every month and to put at least three months’ worth of mortgage payments in savings for emergency situations. If you are having trouble making payments, discuss the situation with your lender.
Costs of Operating a Home
Besides your mortgage, property taxes and insurance, there are many other ongoing costs related to operating your home. They include maintenance and repair, costs for services such as a security alarm, snow removal and gardening (if you wish to pay for these). If you have a condominium or strata, some of these expenses may be included as part of your monthly maintenance fee.
Saving for Emergencies
Even if you know how to do repairs yourself, there are costs involved. Every building has a life cycle, which means that all parts of a building age and require major repairs or replacement at some point. For example, you might know that your roof will have to be replaced in a few years simply because of its age. Repairs like these are expected and can be planned for. However, many repairs are unexpected and can sometimes be costly.
Set aside an emergency fund to deal with unexpected problems ranging from major repairs to illness and job loss. A good guideline is saving 5% of your take-home pay and putting it in a special account.
Living Within Your Budget
Prepare a monthly budget and stick to it. You should monitor your spending every month and evaluate your progress in meeting your financial goals. If you continue to spend more than you are bringing in, you must find ways to cut back. If you are having trouble sticking to your budget, don’t hesitate to ask a professional money manager for help.
Use the Household Budget as a Homeowner worksheet to create your own household budget.
Tips on Home Repair and Maintenance Once you’ve finally settled in, you may start to view your home with a more objective eye. Perhaps there are things you’d like to change — the kitchen cabinets or the flooring, for instance. Perhaps there are things that require repair or replacement, such as the plumbing or the windows. You will soon realize that maintenance, repair and renovations are a normal part of home ownership.
Do Regular Maintenance and Repair
By doing regular maintenance and taking care of small repairs right away, you’ll avoid more costly repairs down the road.
One of the best things you can do is get to know your new home. Here are some things you need to know:
* Your home is made up of various components that work together. These include mechanical systems (heating, air conditioning and ventilation) and the building envelope (foundations, floors, walls, windows, doors and roof ).
* You need to learn enough about the major mechanical systems of your home to be able to perform routine maintenance and handle various emergencies. Every adult member of your household should know the location of and how to operate the following:
o Main shutoff valves for water and fuel (oil or natural gas);
o Emergency switch for the furnace or burner;
o Hot water heater thermostat and breaker;
o Main electrical switch;
o Fuse box or circuit breaker box.
* Renovations targeted at increasing energy-efficiency may affect appliances venting by a chimney. Check chimney performance if you tighten the envelope or add exhaust fans.Remember that homes, like people, get old. It’s a good idea to inspect your home regularly and replace or repair parts and materials that wear out with use and time. And remember that since different components of your home work together and affect each other, minor repairs can quickly become major ones if they are not immediately taken care of.We have included a Maintenance Calendar at the end of this Step that will help you know just what to inspect and when to inspect it.You will probably be able to do many of the repairs yourself. However, if you feel you cannot handle the job on your own, it is best to call an expert. No matter who carries out the repair, remember that the work has to be well done. Bad materials and poor workmanship will end up costing you more in the end. Don’t forget to keep records of any repairs and improvements you make.
Besides doing regular maintenance and repairing your home, you will also want to consider renovating or making improvements. These changes will not only make the home more pleasant for you to live in, they may also increase its value.
Change is good but be careful not to go overboard unless you plan to stay in your home for many years. If you are planning to sell your house, you also have to ensure that the changes don’t make your home worth a lot more than the other homes around you. Remember that the value of your home is closely related to the other homes in your area.
Here are some things to keep in mind when planning a change or renovation:
o Think about how changes would appeal to someone buying your home in the future. You can make very personalized changes with paint because it is inexpensive and can easily be changed. However, things like flooring, cabinets and countertops have a longer life — make choices that will also be appealing to others.
o Think about getting your home energy-rated. This will tell you how energy efficient your home is and what improvements are possible. Visit the Natural Resources Canada Office of Energy Efficiency at www.oee.nrcan.gc.ca/residential to learn more about the eco ENERGY Retrofit program.
o Updating the bathrooms and kitchens in an older home can increase its resale value.
o Don’t underestimate the importance of landscaping. The right planting can improve the appearance and value of your home.
o Updating your exterior paint, installing new roofing, resurfacing your walkways and driveway, adding attractive mailboxes and front-yard planting will also help make your home more appealing.
o Over time, some renovations can practically pay for themselves, especially if they result in savings on utility bills, a higher selling price or years of greater comfort and enjoyment in your home!
o Make Sure Your Home is Fully Secure
+ Change all the locks when you buy a new home.
+ Add dead-bolt locks and window locks where necessary.
+ Consider getting a security system. Your property insurance rate may be lower if you have one.
+ Get fire extinguishers for each floor in the house.
+ When you are away from home, use lights and radios on automatic timers and arrange to have your mail and newspapers picked up or discontinued. This way, people won’t be able to tell that you are not home.
+ Get to know your neighbors and keep an eye out for each other.
Be Prepared and Stay Safe
Have a fire evacuation plan and make sure everyone in your home knows how to get out of the home from each room in case of a fire. If you have a second floor, you need a special escape plan to get to the ground. Check to see that windows have not been painted shut. Although doors and windows should always be securely locked, you have to be able to open them in an emergency.
A few tips:
Fire extinguishers must be easily accessible at all times. If you have a twostorey home, there should be one on each floor. Remember to check your fire extinguishers at least once a year, and to replace them if they are 10 years old or older. To help you remember, make a habit of doing it when you set your clocks to Daylight Saving Time.
In some areas, it is a legal requirement to have smoke alarms in your home. Even if it is not a legal requirement, you will still want them in your home. Check the batteries at least once a year. Carbon monoxide detectors are also important to have. They will let you know if there are high levels of carbon monoxide in your home and can save you from illness or death. To make sure that they are working properly, check them at least once a year. It is a good idea to make a habit of checking your fire extinguishers, smoke and carbon monoxide detectors at the same time.
Paper, paint, chemicals and other clutter can be a fire hazard. Make sure they are stored in a safe place. If you no longer need them, hazardous materials must be disposed of at a community toxic waste center. Never put them in the garbage.
Collect your important papers and store them in a safe place — for example, a fireproof box or a safety deposit box.
Keep a list of emergency phone numbers (including 911, poison prevention line, doctors, relatives, neighbors and friends) close to the phone and make sure your children are aware of it.