The New Homeowner’s Guide: Learn Essential Tips and What to Expect

Buying a new home is a significant and exciting life decision and process. It may seem that once you’ve submitted your down payment, you can begin to see the light at the end of the purchasing tunnel. However, there’s more to homeownership than making your monthly mortgage payments.

Learning about other costs you may encounter, common homebuyer mistakes and potential payment assistance programs can ensure you have all the tools you need in your home-buying toolkit. MoneyGeek’s guide walks you through the new homeowner’s checklist to help make your purchasing process as smooth as possible.

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What You Have to Do as a New Homeowner

Many people focus on whether to rent or buy a house for a while before deciding on one option. When choosing to purchase your first home, there are various factors you need to consider — and they go beyond coming up with the down payment.

After you complete the closing process, you must think of many things. These may include updating your address, changing the locks and ensuring your house is clean before you move in.

Things to Do After You Buy a House

Owning a home requires a lot of effort. Some of it begins as soon as you purchase your home. These include checking your security system and preparing it for your move-in date.

Then others last well beyond after you and your family have settled in. After all, you will need to maintain your home.

MoneyGeek’s guide highlights several must-do steps in your new homeowner’s checklist. Ensuring these are in place can make your move more efficient.

You wouldn’t want to misplace some paperwork, whether it’s your mortgage agreement, inspection reports, insurance documents or birth certificates. Setting up your house and moving is hectic, so you’re likely to lose them with all the hustle and bustle of moving in. Look for a location where you can safely store them. Better yet, purchase a fire-proof safe that can serve your purpose for the long term.
Let people, establishments and agencies know that you’ve moved. It ensures you’ll continue to receive your mail, and your credentials will contain updated information.
Now is the time to go around your property and check out every nook and cranny. It’s not just about knowing where the kitchen is or which door leads to the basement. You need to know where your main circuit breaker and water shut-off valve are. Doing this also serves as an inspection of your home’s condition.
It’s always best to scrub everything down, even if your agent tells you that the construction company or previous owners already did it. Check the kitchen, bathrooms, backyard and gutter and ensure everything is in proper order.
Depending on your home’s condition, you may need to repaint the walls and fix some floor panels. It’s better to do it now while the house is still empty. Once your belongings are inside, it’ll take more work.
Ensure the basics are in place: You have running water, electricity, and gas. In this day and age, you must also schedule your internet installation.
Yes, your agent will give you all copies of the house keys. But you never know whether there are others out there. Your safety is a priority, so invest in new locks and have these installed.

Annual Maintenance Checklist

Unless something dire happens, you’re unlikely to change door locks even after several years. However, there are some things that, as a homeowner, you would want to check at least once a year.

Like all things, your home will need maintenance — it is subject to wear and tear. You’ll find small fixer-uppers here and there, but it usually costs you less if you spot them early.

It’s crucial to ensure that your fire and burglar alarms and smoke detectors are working. Most of these operate on batteries and you’ll eventually need to replace them.
Trim tree branches so that they’re not close to your home. Not only will this prevent animals from entering your home, but it also helps you avoid heavy damage during severe weather conditions.
Unlike other parts of your home, like the garage or the yard, your roof isn’t something you look at closely often. However, it’s best to check if any shingles are missing, cracked or need replacing.
Whether you notice wood damage or not, it’s best to ensure you don’t have termites. The worst thing that could happen is you find out too late. An infestation may already be well underway and could be challenging to manage.

Getting Your Mail Delivered to Your New Home

Sometimes, we take for granted that people know where we live. You only realize you need to notify multiple people, providers and agencies about your change of address when you’re moving.

The following are some of the top essentials to update:

The Post Office should be your first stop. Visit a USPS branch or set up a forwarding address online, so they’ll automatically deliver your mail to your new address.
Government agencies like the IRS, Social Security Administration and Veteran Affairs, among others.
Providers for utilities and insurance.
Banks and other financial institutions.
Memberships and subscriptions (like streaming services).

An illustration of a new homeowner learning the true costs of homeownership.

The True Costs of Homeownership

The median sale price for houses is $454,900 as of the end of Q3 2022. Without question, purchasing a home requires thought because it will impact your finances significantly.

However, there’s more to it than applying for a mortgage and coming up with the down payment. First-time homebuyers usually experience financial stress because they aren’t aware of the hidden costs of owning a home.

To help you avoid this, we’ve broken these down into purchasing expenses and monthly costs. We also explored those connected to maintenance, home repairs and remodeling.

Home Buying Costs

Homeownership costs begin with one-time expenses. As the name implies, these are expenditures that you only encounter once. After paying for these, you usually only experience them again if you purchase or move into another house.

Down payment

This is typically 3–20% of the selling
price, depending on the type of loan
you take out.

The down payment is a payment
you make upfront when you
purchase a home. The higher it is,
the more home equity you have. A
higher down payment also means a
lower monthly due for your
mortgage.
Closing costs

The amount you spend on closing
costs varies, but these usually range
between 2–5% of your home’s
selling price.

Closing costs cover all the fees your
lender or any third-party charges for
their services during the
home-buying process. These may
include payment for home
inspection and appraisal.
Moving costs

Anywhere between $1,128–9,060,
depending on the extent of the
moving services you procure.

You can move all your belongings
on your own or rent a van or storage
container. Full service costs the
most but is the most convenient —
the movers pack everything up,
transport it, and set it up in your new
home.

Make Moving Costs More Manageable

There are many upfront expenses when you purchase a home, especially when it involves moving from one location to another. Many new homeowners look for tips to help them reduce these. Here are some strategies to consider:

Declutter: Do you need to bring everything you have now to your new home? The fewer things you need to transport, the more affordable moving services become.
Compare moving companies: Movers charge different rates, so getting estimates from several before deciding which one to use before deciding on one.
Schedule your move on off-peak seasons: Rates usually drop between May to September, so if you can time your purchase around that time, you may spend less on moving costs.

Monthly Costs

It’s easy to think you can rest easy once you’ve moved in. However, there are monthly expenses that you must consider. Remember, you’ll have to spend on these as long as you live in this house. That means you must ensure you build it into your household budget.

Mortgage
payments

Your monthly payment depends on
your loan amount, interest rate and
terms. It’s best to know the amount
before you sign your mortgage
agreement.

Your mortgage payment is applied
to your home loan. Based on your
loan terms, you will pay monthly
installments for 15–30 years until
the home loan terms are satisfied.
Your payment typically includes
interest, insurance payments and
property taxes.
Insurance
premiums

Homeowner insurance costs an
average of $1,979 per year, while
car insurance comes to $1,424
annually. Remember that your
premiums may vary based on your
profile.

Whether it’s homeowners, flood or
car insurance, having coverage is
always an excellent financial
management strategy. It protects
you against costs from unexpected
damages.
Utilities

The cost of utilities varies, but two
factors affect it — property size and
consumption. Generally, the bigger
your home, the more expensive your
bills become.

Water, electricity, gas and sewer are
staples in any household. Keeping
these expenses covered ensures
that you and your family can
continue your daily routine without
interruptions.
Property taxes

The tax rate for each county is
different, so it’s best to know this to
determine your property tax.
Remember, it’s different from your
monthly mortgage amortization.

You will need to pay property tax as
long as you live in your home.
However, you can’t assume that the
amount remains the same annually.
When your home’s value increases,
so does your property tax.

Manage Your Monthly Mortgage Payment

Some costs require attention each month. One of these is your monthly payment for your mortgage. MoneyGeek’s financial tips for new homeowners can help you better manage it.

Put in a higher down payment: A higher down payment reduces the amount you have to borrow. In turn, a smaller loan amount results in more affordable mortgage payments.
Establish a household budget: Understanding your spending habits can help you determine which areas that require adjusting. Remember, your mortgage is one of your primary monthly payments, so ensure you have enough set aside.
Set up automatic payments: Missed or late payments often result in penalties and fees, which add to your expenses. It also pulls your credit score down, affecting other financial areas, such as insurance premiums.

Maintenance Costs

Everything undergoes wear and tear, including your home. Remember, you don’t need something to break down before paying attention to it. Investing in maintenance is an excellent strategy to avoid more expenses. To be safe, set aside 1–4% of your home’s value each year for maintenance costs.

Deep cleaning

Expect to spend between $200–400
for professional deep cleaning
services. The rate varies depending
on the size of your home and your
location.

Deep cleaning goes beyond wiping
your table and shelves and
mopping the floor. This cleaning
service ensures that every inch of
your home gets proper attention —
even the space beneath the couch
that’s challenging to reach.
Pest prevention

Ensuring your home remains pest
free can be as low as $50 or as
high as $8,000 but generally
averages between $200–600.

Whether you need lice removal or
termite fumigation, ensuring your
home is free from unwanted guests
is always a worthwhile investment.
Pests can cause significant damage
to your home, which leads to more
expensive repair costs if you don’t
catch it early.
Landscaping or
lawncare

It’s best to keep your lawn from
becoming overrun. It’ll cost around
$100–200 per month.

A well-manicured lawn adds to your
home’s curb appeal because it’s
one of the first things guests see.
Besides these, a poorly-maintained
one can also attract insects and
hide hazards that might harm you
or your kids.
Pool care

Not everyone has a pool in their
home. But if you do, prepare to
spend around $80–150 per month
for maintenance.

A pool is a luxury that comes with
additional costs. Besides the
maintenance, it may also affect
your water and electricity usage.
However, a dirty pool can be a
breeding ground for parasites,
bacteria and mold. It may even
cause recreational water illnesses.

Financial Tips for New Homeowners to Reduce Maintenance Costs

They always say prevention is better than cure. This applies to your home, too. Regular maintenance can help you prevent extensive damage in the future, but it can quickly increase your expenses. Here are some strategies to shave off some dollars:

Don’t skip it: Yes, maintenance adds to your workload, but it’ll allow you to catch things sooner rather than later. It could help you avoid a more expensive repair later on.
Do it yourself: You don’t need to hire professionals for all maintenance activities. If the task isn’t complicated, you can try to do it on your own. It may require more effort, but it’ll cost you less.
Choose your providers carefully: Rates vary between service providers, so it’s crucial to compare what they offer before deciding on one.
Build relationships: You’ll eventually find providers you prefer, and you may decide to use their services regularly. The more you work with them, the better your chances of striking a deal or getting a discount.

Home Repairs and Remodeling Costs

Things will eventually start breaking down, even if you do routine maintenance. A leaky faucet may not be so bad on your finances, but a foundation repair is entirely different.

You may eventually want to have some areas of your house remodeled. It’s a great way to increase your home’s value, but remember that these may be costly.

Foundation
repair

Homeowners spend an average of
$4,500 to get their home’s
foundation repaired, but costs can
range from $2,000–7,500.

When your home’s foundation is
damaged, you may have to repair
cracks, bowed walls and leaks. You
may also experience settling and
settling, which you need to address
before it could cause more
extensive damage.
Roof repair or
replacement

You’ll spend around $1,000 to get
your roof repaired. However, your
expenses may vary depending on
the extent of damage and
replacement.

Repairing damages to your roof can
go a long way to prevent a
replacement, which costs
thousands of dollars. Roof repairs
cover fixing small leaks or replacing
shingles or other roofing materials.
Water damage
repair

Restoration due to water damage
can cost an average of $3,314. The
amount varies depending on the
type of water, class of water
damage and the area of the house
where it happened.

Restoration services cover water
damage from leaky faucets, burst
pipes, overflowing appliances or
toilets or floods. And these aren’t
limited to your kitchen or bathroom
— it extends to your basement and
drywall. Leaving it unattended may
result in something worse, like
mold.
Mold removal
and remediation

It can cost anywhere between
$500–30,000. It’ll depend on
whether the mold is isolated in a
specific area or has spread.

Mold removal and remediation
involve isolating infected areas,
ventilating your home and removing
the moldy material. Services also
include disinfecting your home and
replacing the material.
Remodeling and
renovation costs

You might have to shell out $16,000
to over hundreds of thousands of
dollars for a home renovation. It
depends on the size of your home
and the extent of your renovation.

Basic remodeling involves aesthetic
upgrades and minor repairs. It also
includes some lighting and floor
replacement, which can be
affordable. However, if you want to
get modern HVAC, plumbing or
electrical systems, it’ll cost you
more. Major remodeling may also
mean changing your home’s layout.

Strategies to Lower Renovation Costs

Renovating your home is an excellent idea. It increases your home’s value and may save you money in the long run (think energy efficiency). However, whether it’s a minor project or an extensive one, you’ll need to shell out some money. Here are some tips for new homeowners to help keep costs under control.

Have a budget and stick to it: Starting with an upper limit can help you decide on the kind of renovation you want to undertake. It’ll also direct choices when it comes to materials and purchases.
Do some of the tasks yourself: Don’t leave everything to your contractors. You can do the demolition work yourself and pick up the materials.
Reuse and repurpose: There might be fixtures that you want to remove, but see if you can use them for something else. This way, you will only have to purchase new items for some things.
Watch out for deals: If you want to replace furniture or appliances, wait for a sale before purchasing new ones.

An illustration of a new homeowner learning the best time and strategy to pay off their mortgage.

Paying Off Your Mortgage

HomeLight’s 2022 Buyer and Seller Insight Report found that 69% of new homebuyers used a mortgage to purchase their home. It’s an excellent way to help finance your home purchase, but it also means ensuring you have the means to make your monthly dues until you’ve repaid your loan.

MoneyGeek’s guide provides tips to homeowners about paying their mortgage, understanding the factors affecting the amount and exploring programs that could help you with your expenses.

When Should You Pay Your First Mortgage?

Your first mortgage payment typically depends on your closing date.

Closing towards the end of the month gives you about 30 days to prepare for your first payment. However, closing early in the following month provides you with more time. For example, if you close on May 28, your first payment is due around early July. However, if you close on June 3, your first payment will be due in early August.

Regardless of your closing date, you’ll pay the same amount. However, the more time you have until your first payment, the higher your closing costs are.

Afterward, you’ll pay your monthly amortization on the same day each month. Setting up automatic payments is an excellent strategy to avoid missing them and incurring late fees and other penalties.

Factors Affecting Your Mortgage Payment

Lenders consider several factors when calculating your monthly due, such as the following:

Your credit score

Your home’s location

Loan amount

Repayment terms

Your down payment

Type of interest rate

Fixed-rate loans assure you that your monthly due remains constant for the life of your loan. MoneyGeek’s mortgage calculator can give you an estimate of your monthly due.

Variable-interest loans have lower rates but are affected by market conditions. If your lender increases interest rates, your monthly due also becomes higher.

New Homeowner Mortgage Assistance

Purchasing a home is a significant financial obligation. Although mortgage payments aren’t the highest contributor to homeowner costs, it still accounts for 30% of expenses.

Most people have 30-year mortgages, which may become challenging to manage over time. Fortunately, you can find financial assistance or programs to help you.

The Department of Housing and Urban Development sponsors low fixed-rate mortgages with 20-year loan terms. However, to qualify for it, you must meet the following criteria:
- Must be a first-time, first-generation homebuyer
- Income must not exceed 120% of the median income of your area
The program allows new homebuyers to build equity twice as fast while roughly paying the same monthly amount as you would with a 30-year mortgage.
Remember, the higher your down payment is, the more manageable your monthly due becomes. Homeowners strapped for funds can avail of the NHF’s down payment assistance to help with upfront costs.

You can get as much as 5% of the mortgage loan amount, which you can use to cover your down payment or closing costs. Although the NHF considers your FICO score and DTI ratio, its requirements are more flexible than traditional lenders.
Instead of borrowing from private lenders, you can consider those the federal government offers. Examples of these are as follows:
- FHA Loans: Only requires a down payment of 3.5% if your credit score is 580 or higher. Borrowers with lower FICO scores must come up with a 10% down payment.
- VA Loans: Best for veterans, surviving spouses and active military members. You can get lower interest rates and won’t have to pay a down payment.
- USDA Loans: This government home loan works best for homebuyers with low to moderate income from rural areas. It doesn’t require a down payment, nor has a minimum credit score requirement.
These could be better mortgage options compared to traditional ones.

An illustration of a new homeowner learning mistakes they need to avoid.

4 Mistakes New Homeowners Should Avoid

Purchasing your first home is an adventure, and you’re likely to be more excited about starting home improvement projects or looking for ways to improve your forever home. Be careful not to take on too much. As a new homebuyer, you may make some financial mistakes that could affect your bottom line.

Not budgeting for costs outside your mortgage

Yes, your monthly mortgage payments are crucial, but they shouldn’t be your only focus. Owning a home comes with other expenses, such as paying your property tax or getting a homeowners insurance policy.

Starting too many home improvement projects

The beauty of having your own home is you’re free to make improvements as you see fit. Remember each project you undertake adds costs to your household budget. Having too many may eat into your mortgage payments or savings.

Deprioritizing regular maintenance

It’s easy to say you’ll deal with seemingly insignificant damages later, but the longer you wait, the more extensive they become. Doing routine maintenance (and acting accordingly) can help you save money in the long run.

Making multiple significant life changes at the same time

You must consider the timing when you purchase a home because it’s a considerable commitment. For example, if you plan to make a career shift, wait to do it until after you’ve bought a house.

Expert Insight on What to Expect as a New Homeowner

Industry leaders and subject matter experts are excellent sources of tips for new homeowners. MoneyGeek reached out to several and asked them to provide their insights.

After paying the closing costs, most homeowners mostly focus on paying for their mortgage, insurance and property taxes. What costs do new homeowners usually forget about?
What challenges do first-time homeowners usually encounter but don’t anticipate?
What advice can you give new homeowners to make their move less stressful?

Brendan Kennealey

Founder and CEO of NESTER

Jennifer Spinelli

Founder & CEO of Watson Buys

Michael Sullivan

Personal Financial Consultant at Take Charge America

Resources for New Homeowners

Owning and maintaining a home is a considerable financial commitment. Besides providing new homeowner financial tips, MoneyGeek also included a list of resources that may make homeownership less overwhelming.

Checklist

The Only Moving Checklist You’ll Ever Need: Moving from one location to another can be stressful. This checklist helps you put things in order and prevent anything from falling through the cracks.

Calculators

Budget Calculator: It’s crucial to know where your money’s going and ensure you have enough funds set aside for monthly or maintenance costs. This calculator incorporates various expenses, from housing, transportation, debts and loan payments, among other things.
Estimator Tool: This online tool helps estimate expenses for a remodeling project, paint job or window and door replacements. You can even calculate the potential cost based on the hourly rates of various contractors.
Home Maintenance Calculator: Figure out possible home maintenance costs based on the age of your home and appliances.
Remodeling Calculator: Figure out how much money your renovation can cost. You can use different parameters to help you get a more accurate estimate.

Financial Assistance Programs

First Home Club: The Federal Home Loan Bank of New York offers a matched savings plan to help first-time buyers purchase a home. Read about the eligibility requirements and see if they apply to you.
Freddie Mac Home Possible: Freddie Mac’s mortgage option offers flexible requirements. You may want to consider it if you’re looking for financial assistance.
Help Buying a New Home: USA.gov shares a list of programs you can explore to help you purchase a home. Check if you qualify for some of them.

Service Providers

FMCSA-Registered Movers: Unless you’re planning to haul your belongings to your new home yourself, you’re likely to hire movers to do it for you. You can use this site to find approved movers, especially if traveling from one state to another.
Home Guide (Landscapers Near Me): Each landscaping company has something different to offer. Use Home Guide to find several service providers in your area so you can make a comparison.
PestWorld: Pest control is an essential part of maintaining your home. Find an exterminator near you through PestWorld’s database.

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The New Homeowner’s Guide: Learn Essential Tips and What to Expect