Licensed Correspondent Lender
1545 South Belcher Road
Clearwater, FL 33764
727.687.4762
Linda A. Kelada
Sr. Loan Specialist
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Licensed Correspondent Lender 1545 South Belcher Road Clearwater, FL 33764 727.687.4762
Linda A. Kelada Sr. Loan Specialist
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BEFORE AND AFTER MOVING DAY
Before you settle, you should inspect the home carefully to be sure that it is in good condition, and that the builder or seller has completed everything called for in the contract.
After settlement you will move into your new home. When you do, you may have to do a certain amount of touching up, some of which may be the result of your moving in. After that, if you have a new house, your maintenance expenses should be very little for the first few years.
Obtain copies of the manufacturer’s warranties from your builder or seller for any mechanical or electrical equipment included in the home. This includes the heating and cooling system, water heater, refrigerator, range, washing machine, dishwasher, etc.). Also get information as to whom to call in case the equipment needs to be serviced. Follow any instructions supplied to you on how to use and maintain each piece of equipment properly.
Once you buy your home you will have to pay for future repairs and upkeep. However, when you buy a new home, your builder will give you a warranty, which may vary from place to place. Some older homes are also sold with homeowner’s warranties.
If you buy a house that was previously occupied, there is usually no action you can take against the seller to have defects corrected unless there has been misrepresentation by the seller. This makes it even more important to be sure the home is in proper condition before you settle.
Remember, you are obtaining a loan that must be repaid, just as you must repay any money you borrow. If you fail to make your payments, you may lose your home through foreclosure, and you could lose all the time and money you had invested in it.
FUTURE COSTS OF HOMEOWNERSHIP
Your down payment and closing expenses are costs you will have when you close on your new home. But they are only the initial costs. You must also be able to pay the future costs from your income, as follows:
Mortgage Payments. You will need to make monthly payments to cover interest and principal on the mortgage. This is usually the biggest item of monthly expense.
Taxes and insurance you will also have to pay future real estate taxes and assessments, and for insurance on your home. Usually your lender will add the cost of real estate taxes and insurance to your monthly payment. Keep in mind that your monthly payment may later be increased if real estate taxes or insurance costs rise.
Heat and utilities you will have to pay your heating cost and your utility bills. The amount of your fuel bill will vary, depending upon the climate, how well the house is insulated, etc. Utility bills for electricity water, gas, and the like will also vary depending on the extent to which your household uses them. Be sure to make adequate allowance for these items. It might also be a good idea to check with other homeowners with similar houses in the area.
Maintenance. Time, the elements and usage take their toll on houses. You will have to be ready for the cost of maintenance and repairs. You may have to paint every few years. Your heating and electric system may need repairs from time to time. Your roof may need repairs. You will have to replace equipment, and so on. If yours is a well-constructed new home, these expenses should be modest during the first two or three years. But they will rise as your home ages. Seek advice from a qualified source as to the probable cost of maintenance, so that you can put aside a small amount each month for future maintenance expenses.
Homeowner associations are formed to protect the value of your property as well as to provide maintenance of neighborhood recreational facilities and park and landscaped areas that are part of the residential development. If you are required to join a homeowner association, dues or periodic assessments may be a significant expense item.
Other Debts. You may already have other debts such as credit cards, furniture or automobile payments. And you may also have to buy things for your home on an installment plan. You will need a budget to meet these payments as well. Be careful. Some homebuyers run into serious trouble because they burden themselves with too many things for their new home on their credit cards or the installment plan.
PREPARE A BUDGET: YOUR PERSONAL SPENDING PLAN
A realistic budget is vital to your success as a new homeowner. You need to be practical about your income and your expenses. There are many reasons for this.
A budget helps you keep control of your finances – present and future. It helps you prepare for large expenses – both expected and unexpected. It will also help you identify which types of expenses are out of line.
As a new homeowner, you will have new types of bills to pay, and you can’t call your landlord when something breaks. You need to be prepared to pay. This requires budgeting your spending to a level below your income - and setting money aside in a savings account so that it is there when you need it.
Your Monthly Income:
Your first question in setting up your budget is “How much do we have to spend each month?” This should be a net figure - your total take home pay after taxes and other deductions.
Your Monthly Expenses:
Now list your expenses. Again, break down quarterly, semiannual and annual payments into monthly expenses.
Be sure to update your housing expense figures to the amounts you will be paying after you move into your new home. You’ll have to estimate some of these costs, like utilities and maintenance. It is better to estimate higher rather than lower. When budgeting for maintenance and repairs most financial experts recommend budgeting 1% of the purchase price of the home for future maintenance.
Lastly, don’t forget to budget for your hobbies, vacation and entertainment.
Budgeted Savings:
You probably won’t be successful as a homeowner unless you set up a program of monthly contributions to a savings account at the bank. Think of this as a “rainy day fund” or a “nest egg” in case you get sick or laid off from your job. You must have a safety net for unexpected emergencies. A good rule of thumb for a savings account is 5% of your take-home pay.
Compare expenses to income:
After you have completed filling in your budget, compare your expenses with your income. If your expenses are more than your income, you are already living beyond your means. You will have to make adjustments. Some expenses are “fixed.” You probably can’t do much about them. But other expenses are “discretionary.” That means you have flexibility in deciding how much you can spend in these categories. Here the question is “What do I need?”- not “What do I want?”
YOUR PERSONAL BUDGET
Actual Planned NET INCOME $ $ . (Include Monthly income from all sources.) EXPENSES Housing: Mortgage payments $ $ . Utilities $ $ . Condo or Association Fee’s $ $ . Maintenance $ $ . Taxes $ $ Insurance $ $ . SAVINGS $ $ . (5% of your net income is recommended.) Household: Food $ $ . Clothing $ $ . Personal: Medical $ $ . Dental $ $ . Childcare $ $ . Telephone $ $ . Entertainment $ $ . Sport and Hobby $ $ . Vacation $ $ . Automobile: Car payments $ $ . Car insurance $ $ . Car maintenance $ $ . Gasoline $ $ . Parking $ $ . Financial: Loan payments $ $ . Credit card payment $ $ . Miscellaneous: $ $ . Total monthly expenses & savings $ $ . Over or Under (Income – expenses & savings.) $ $ .
IF YOU CAN’T MAKE YOUR MORTGAGE PAYMENT
If you can’t make a mortgage payment, you should contact your lender at once. Missed payments are usually due to loss of income related to job loss, divorce or marital problems, death of a family member, major illness, etc. There are several ways your lender can help you through your financial trouble.
Contacting your lender right away shows that you intend to meet the problem head-on. It’s a good idea to write to your lender before the payment is due, explain your problem, and why it is affecting your ability to pay. Make a partial payment if you can to show your good faith. You may also want to discuss your situation with a credit counselor.
MAINTAINING YOUR HOME
Do-it -yourself repairs
The day you become a homeowner, you should have a basic tool kit to take care of the little things that may need fixing. Start with a hammer and a couple of screwdrivers -one straight blade and one Philips head. You should also have a pair of pliers and a tape measure. And of course you’ll need a flashlight, as well as a plunger for sinks and toilets. A handsaw and a wrench are also good ideas. Keep a first aid kit with band-aids, bandages and medicines in an easy-to-reach place.
Don’t be afraid to ask for help at your local hardware store. Local hardware stores, building supply dealers and community colleges often offer home repair courses. You may also buy basic home maintenance books and videos at most hardware stores or borrow them from your local library.
Neighbors can also be a big help. Make it a point to meet your neighbors when you move in. They can be invaluable in case of an emergency. They also may be able to point you to valuable sources of information in your community.
Resolving problems with a new home
If you have purchased a new home, you should be aware that the typical house contains more than 3,000 different parts. Even the best-built homes are likely to need a few corrections. A builder corrects most problems routinely. However, if a non-routine problem should arise, you should follow certain procedures. Familiarize yourself with your warranty. Identify the exact nature of the problem and put it in writing to your builder. Include all relevant documents (send copies, not originals). Keep a copy of your letter. Deal directly with your builder - try to avoid expensive legal proceedings. In the event of an impasse, you may want to contact the local builders association.
Major repairs and improvements
There are times when you shouldn’t try to do it yourself you just have to call in an expert. These might be for fairly minor emergencies when health and safety are critical and you need a plumber or an electrician. In these cases, be sure your mechanic has the proper license to do the job.
Check your warranties to see if the item that needs repair - such as your heating system, washing machine or roof-is covered. Also check your homeowner’s insurance policy (or call your agent).
Now, how about the big job - the kind that requires a contractor? Where do you start looking for a reputable contractor? Start by seeking referrals from friends, family members, neighbors, co-workers, and others who have had work done. You might also want to talk to local building materials suppliers, architects, home inspectors, local lenders, as well as contractor trade associations.
Before you finally sign a contract, call your local or state consumer protection agency and the Better Business Bureau to find out if there are any unresolved complaints filed against the contractor. You should also contact your state’s contractor licensing agency and state and local building inspectors to verify that the contractor has the appropriate license and a clean record. It’s also a good idea to check with other homeowners that the contractor has done similar work for.
Get proposals from several contractors, based on the same set of specifications. Insist on a written contract that lists the work to be done, the schedule for completion, and the schedule of when payments are due.
SEASONAL MAINTENANCE CHECKLIST
Put together a seasonal checklist for routine seasonal maintenance items for your home. Then mark your calendar so that you’ll remember to do the task.
Here is a checklist put together by Fannie Mae to use as guide for your new home.
Fall Checklist
Outside:
q Check all weather stripping and caulking around windows and doors; replace or repair as needed.
q Check for cracks and holes in house siding; fill with caulking as necessary.
q Remove window air conditioners, or put weatherproof covers on them.
q Take down screens (if removable type); clean and store.
q Check storm windows and doors; clean and repair as needed put back up (if they are removable).
q Drain outside faucets.
q Clean gutters and drain pipes so that leaves won’t clog them.
q Check roof for leaks; repair as necessary.
q Check flashing around vents, skylights, and chimneys for leaks.
q Check chimney for damaged chimney caps and loose or missing mortar.
q Check chimney flue; clean obstructions; make sure damper closes tightly.
Inside:
q Check insulation wherever possible; replace or add as necessary.
q Have heating system and heat pump serviced; have humidifier checked; change or clean filters on furnace.
q Drain hot water heater and remove sediment from bottom of tank; clean burner surfaces; adjust burners.
q Check and clean humidifier in accordance with manufacturer’s instructions.
q Clean refrigerator coils.
Spring Checklist
Outside:
q Check all weather stripping and caulking around windows and doors, especially if you have air-conditioning. q Check outside house for cracked or peeled paint; caulk and paint as necessary. q Remove, clean, and store storm windows (if removable). q Check all door and window screens; patch or replace as needed; put screens up.
Inside:
q Replace filters on air conditioners. q Check and clean dryer vent, stove hood, and room fans change or clean filters on furnace. q Check seals on refrigerator and freezer; clean refrigerator coils; clean burners surfaces; adjust burners. q Clean fireplace; leave damper open for improved ventilation if home is not air-conditioned. q Check basement wall and floors for dampness; if too moist, remedy. q Clean dehumidifier according to manufacturer’s instructions. q Check for leaky faucets; replace washers as necessary. q Check attic for proper ventilation; open vents. q Clean drapes and blinds; repair as needed.
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