Buying a home is a great American dream. However, too often first time home buyers (second timers too) save and pay for the purchase, but don't really plan for the ownership.
Home prices have been rising so rapidly that it is not uncommon for the buyer to buy as much home as they possibly can. They might get the Seller to pay for Closing Costs. They might not be able to afford the down payment and therefore purchase utilizing an 80% 1st mortgage and a 20% 2nd and are squeaking by to make the purchase. They count on an increase in housing costs by preparing for the mortgage payment cost over what they were paying for rent. However, what they never seem to plan on is the cost for homeownership.
I have a loan closing today for new homebuyers that fit the above scenario. They don't have extra money, yet now that they are getting ready to move into the home, they find that the Seller didn't clean the carpets or anything else for that matter. Now the Buyers are going to have to pay to have the carpets cleaned. They didn't count on that. The refrigerator is making a noise and if it's giving out, then that will be another expense that wasn't planned on. I remember that my dishwasher gave out two weeks after I moved into my home. There no longer is a Landlord to call to get to pay for such repairs. Now the expenses fall on the Homeowner.
The roof will not last forever. It will need repair or replacement eventually. Maintenance has to be kept up to keep the property from having undue expenses. I've got wasps making nests on the back of my house. I can go and fight them myself (although I'm afraid of those little pests) or I will have to pay someone to clear them out for me. Painting has to be done sooner or later on a home. The expenses of home ownership go beyond the house payment.
So, if you are looking to buy your first home, you should figure out what 1% of the value of your home is, divide that figure by 12 and put that amount away into savings each month to cover the addition expenses that homeowners typically do not prepare for. For example, on a $195,000 valued home, that would be an extra $162.50 per month. From this amount will come the new lawn seed this summer, the flowers that the misses will want to put in the yard, the peg board that will go into the garage for hanging up all the mr.'s tools. When the water heater goes, you will be prepared. Without putting money aside, when those unwelcome expenses come up, they will reek havoc on the family budget.
A little planning ahead for the unforeseen can make all the difference in the world.