There’s nothing more exciting than buying your first house, especially when you’ve been scraping the bottom of your bank account to save for a down payment. But now that you’ve bought the house, it’s important to know the difference between scraping the bottom of your bank account and digging your own financial grave.
Here are five mistakes first-time homebuyers make during their first year of living in a house and what you can do to avoid making the same choices.
Taking on a major renovation
With up to 16% of first-time homebuyers looking for new homes in urban areas, which are often more expensive, it makes sense to buy into a fixer-upper. In fact, 14% of homeowners said they planned to improve their kitchens in 2018.
But it’s important to start small. Fix what needs to be immediately repaired before making any cosmetic changes. Remember that your home isn’t going anywhere and can always be renovated later on.
Ignoring problems that need your immediate attention
As we mentioned above, it’s crucial to fix the things around your home that need immediate repairs before you even think about renovating your kitchen or master bath.
Problems like water leaks can waste up to 180 gallons of water per week in the average household, and weather damage is the reason behind 65% of roof repairs.
When you repair issues like water leaks and roofing damage, you reduce the risk of having to pay for a major home disaster later on like burst pipes or water damage.
Paying for projects with a credit card
As a first-time homeowner, you’re balancing student loan debt and a new mortgage payment. The last thing you want to have to manage is thousands of dollars of credit card debt.
But you’d be surprised by just how many first-time homeowners choose to borrow over $5,000 to take on projects around their new house. Credit cards can have hefty interest rates, which make them difficult to pay back. To avoid the dangers of credit card debt, wait on these home projects until you have the cash to do them.
Assuming your windows and doors are energy-efficient
You might assume your home has energy-efficient windows and doors because it was built within the last decade. But whether your home is new or not, it’s best not to assume that your home is in the best shape when it comes to energy efficiency.
Find out which places inside your home need to be sealed or re-caulked to cut down on your monthly energy bill. Light a candle and run the flame along your windows and entryways to locate any potential air issues or drafts.
DIY-ing when you shouldn’t
It’s tempting to choose the DIY approach when it comes to improving your home, especially when you’re trying to save money. But it’s good to know your limitations.
Don’t try to DIY any plumbing or electrical work. Instead, hire a professional. Sometimes hiring someone who’s experienced the first time can actually save you more money in the long run than trying to do it yourself.
It’s easy to rush into home improvement projects when you’ve just bought a new house. But it’s important to recover financially from buying your house first. By avoiding the mistakes above, you can keep yourself financially secure and avoid common home-buying pitfalls.