Step 4: Becoming a Homeowner
Congratulations are due, you’ve done it! You follow your dream, visited your local Urban League for advice and planning – now you’re a homeowner. This is an exciting time, but before you start making plans for remodels, additions onto your porch or a new garage – there a few things to keep in mind that will keep you in your home for generations to come.
Prepay your mortgage as much as possible
Making extra payments toward the principal balance on your mortgage loan will reduce the amount you will be charged interest on and can help you save money and pay off your loan faster. Even one extra mortgage payment a year can significantly reduce your mortgage costs.
Keep your debts as low as possible
You will need as much as possible to save for your home’s needs and the more debts you can clear off, the greater your saving power will be. You want to make sure you can use this opportunity to continue to save and build wealth!
Stay on top of your credit
It’s important to keep track of your credit report and score. To make sure all is and remains accurate, monitor your credit report for any possible fraudulent activity. Maintaining a good credit rating will allow you to have well priced options for additional credit should you need it. You can get a free credit report from each of the major credit bureaus each year using www.annualcreditreport.com. This is the only nationally vetted and free site for pulling your reports. Other online companies that provide money management tools also provide free credit score monitoring such as CreditKarma, Mint, and CreditWise, among others.
Be careful not to run up your credit cards
It's natural to want the best furniture and all of your dream renovation projects done as soon as you move in. However, if you’ve spent your savings on purchasing the home - give it time. Stay with the furniture you have now and build gradually over time. You can quickly get in over your head with debt if you don’t carefully manage your spending post-purchase.
Build up a home savings account
Unlike apartments buildings with landlords, when things happen in your home - you're on the hook for repairs. Be prepared for unexpected challenges such as broken water pipes, boilers, needed electrical upgrades, etc. so that you are prepared ahead and don’t get in over your head when something comes up, as it inevitably will.
Stay up to date on your taxes and municipal bills
Like water and sewer in order to avoid adverse local actions against your property. If you get behind on your city, state or county bills you could risk losing your property and all that you are building up!
Now that you’re on top of your new homeowner finances, check out our last step, Build Your Future, to see how as a homeowner you have a say in your community.