Buying your first home is exciting, at the same time it can be a little overwhelming. It’s easy to get carried away with the thrill of stepping into that perfect space for the first time, but it is also important to remain level headed about the home buying process so that you spend within your means.
As great as owning your own home is, you’ll want to have a life too. As you look at your housing options be sure to consider all of the costs associated with owning a home. First, there’s your mortgage of course. If you’re currently renting, be careful not to automatically think that your mortgage amount can equal your rent with the same financial impacts. For example, there may have been costs that were included in your rent such as water, cable, electricity, which you’ll now have to pay separately. As a home owner you’ll incur other regular expenses like property taxes, home and condo maintenance.
You’ll also want to think about the first things you’ll need to buy for you home. Do you need a lawn mower? What about window coverings or light fixtures? Individually these items aren’t too expensive but they can add up quickly. It’s also very important to take a look at the state and age of your appliances (water heater/tanks etc.). If they are old or need to be repaired or replaced soon, you will want to set funds aside. In fact, having an emergency fund for unplanned expenses can be smart, if not essential.
Once you have your home expenses figured out, think about your lifestyle, what’s important to you? Do you have a passion for travel? What about sports, dinning out, entertainment, or other activities that are considered luxuries. Once you become a home owner you want to be sure you still have money available to enjoy the things that are important to you.
Taking into consideration all of your expenses, home related or not, can be important if you’re going to find the right balance between owning a home and maintaining a fulfilling lifestyle.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.