Here at Be New Orleans, we are huge fans of young homebuyers! Embarking on a house-buying journey in your twenties can feel daunting, but it’s a major milestone. And the earlier you get into the real estate game, the better! However, we also recognize that if you’ve never lived outside your parents’ home, then there are many things you may not be factoring in.
One of the first steps in buying a house is figuring out your homebuying budget. A great lender will ask you how much you’re comfortable spending a month on your mortgage. This can be a hard question to answer if you’ve never even paid rent before! Many experts will tell you that you shouldn’t spend more than 30% of your monthly income on your housing budget. But, in the current real estate landscape, we have seen many people spend 40-50% of their income on their mortgage. While this can make us nervous, if you don’t have other debt and you’re comfortable with it, let it ride for you! Only YOU can make this determination. If you’re savvy with your money, then you know better than anyone else.
Utilties
Many first-time homebuyers who haven’t lived outside their parents’ homes forget to factor in all the utilities. Electricity, gas, water, trash, and internet will all contribute to your monthly spending. You can have your real estate agent ask the current homeowner for their average bills. Please remember that this isn’t set in stone. Maybe they like to keep their houses warmer or colder. Maybe they work from home and use a lot of power. Maybe they travel for work and are never home.
These bills fluctuate based on how you use them and how many people live in your home.
Repairs
ALL, and I mean ALL, houses need repairs. Every house needs things – even newly renovated ones. You have to budget for things going wrong. If your dishwasher breaks and it’s out of warranty, you’ll have to pay for it. A new water heater will cost around $2,000. A new AC could cost $10–$15k. Your mama isn’t going to handle your repairs, so make sure you have some cushion for these emergencies!
Regular Maintenance
The basic things that keep your home’s mechanics running smoothly should also be considered. AC filters should be changed monthly. Your AC needs to be cleaned and serviced annually – but truly twice a year is best. Your fridge may need new filters if it has a water or ice maker. It’s these little things that add up!
[IMPORTANT READ: HOW TO MAINTAIN THINGS IN YOUR NEW ORLEANS HOME]
The extras
If the home you purchase is in an X flood zone, you will have to pay for flood insurance in addition to your mortgage costs. This policy can range from $500 to over $3,000 per year! While you’re not required to have flood insurance, we would never tell you not to have it!
An annual termite contract will also run you a couple of hundred dollars per year.
[IMPORTANT READING: EXTRA COSTS OF OWNING A HOME]
We want to set you up for success as you move out of your parents’ house and into your first home. The only way to do that is for us to be honest and make sure you’ve considered all the lagniappe items that come with buying a home!
Want to chat with us about starting your New Orleans homebuying journey? Send a text!
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