Yay! You’ve purchased a home. Congratulations are in order! Whether this is your first homebuying experience or you’ve owned several homes in the past, it is never a bad idea to take a few moments to tick through this checklist to make sure you’re on top of things!
1. Adjust your budget
With a new home comes new expenses. Be sure to adjust the amount your spending on your mortgage, utilities, cable/internet, home insurance, association fees, necessary repairs, new furnishings, etc. Another thing to adjust? Your overall savings and retirement contributions. As you take inventory of your new budget and expenses, try to see if you can possibly increase your savings or retirement contributions. If so, be sure to take action as soon as possible.
2. Update your insurance coverage
While you have may have a homeowner or renter’s insurance policy in place previously, it is always wise to ensure your new home (and all of it’s various quirks) are accounted for in your new policy. For instance, if you have moved to a relatively safer neighborhood that is less prone to crime, you may be able to decrease the overall insurance rate due to the perceived risk decrease. On the other hand, if you now live in an area that increases your overall risk or liability in other categories, you’ll want to make sure your new policy covers these possibilities.
3. Update your estate plans
If you had previously included your primary residence as part of your estate plans, you will need to update these documents/plans as well. It is easy to forget to make these updates, so set a reminder on your calendar or phone if need be to make sure you make this a priority.
4. Keep your accountant informed
When it comes to tax season, you’ll want to make sure to adjust for your new mortgage expenses and interest. Based on how things may have shifted, you may be left with a significant change to what you can deduct or claim. Regardless, be sure to mention this life change to your accountant when the time comes.
5. Rebuild your emergency fund
Owning a home sometimes involves the discovery of not-so-fun surprises and problems. Though having homeowners insurance and various warranties can certainly help, you’ll need to have a strong cash reserve to be able to account for other issues that arise: leaks, cracks, damage, floods, faulty appliances, replacement costs, etc. Don’t rely on your credit card to bail you out and set you back if you need to suddenly make a pivot.
6. Thoughtfully consider refinancing
If it becomes apparent that refinancing your mortgage to take advantage of a more favorable interest rate makes sense, be sure to contact your lender and/or financial planner as soon as possible. Depending on the specific terms and conditions of your current mortgage, it can make a lot of sense (and save you quite a bit of money!) to refinance at the appropriate time. Keep a watchful eye on some of those economic pieces and get advice or thoughts if you have any questions.
7. Aim to create a “maintenance” cash reserve
Most experts claim that annual home maintenance can amount to around 1% of the home’s value. For example, if your home is worth $300,000 then you’d realistically want to have $3,000 in funds set aside every year to be able to take care of the less fun issues like snow removal (if applicable), pest control, lawn care, landscaping, small cosmetic home projects, etc.
8. Get organized
It always helps to keep a record of every home document (and all other types of important documents, for that matter). Your method of organization doesn’t have to be complicated or overly fancy. You can simply purchase a few folders or envelopes and keep all receipts, records, contracts, warranties, and other home documents in a safe place that you can easily access, if need be.
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