Are the costs of home repairs worth the price of homeownership?

One drawback for many would-be homeowners is the idea of being responsible for home repairs. When you rent, if something breaks, you call the landlord, and it’s their responsibility to arrange a repair and pay for it. That can be a very attractive idea, especially if you aren’t handy or don’t have the skills to tackle a home repair yourself. So many people continue renting long after they can afford to buy a home because of this fear. But as we all know, some landlords and property owners can be slow to tackle needed repairs or only do the bare minimum, which can be stressful on your living situation. When that happens, it can be a long and challenging fight that can leave you feeling powerless or looking for a new place to rent.

As a homeowner, when a repair or home issue comes up, it’s your responsibility to fix it. There’s no landlord to call or fight to get the repair done. Instead, you must shoulder the cost and arrange for appropriate tradespeople to address the issue. For many would-be homeowners, that can feel daunting and keep nervous would-be buyers from taking the plunge into homeownership. So what can you do to feel less anxious about being responsible for home repairs as a first-time homeowner? Here are a few tips we’d like to share.

• Set up a repair fund: The best thing you can do as a first-time homeowner is to be prepared. So set aside a portion of your monthly budget for repair and home expenses. Some experts suggest at least 1-4% of the value of your home each year for ongoing maintenance or repairs.
• Take into account the age and condition of your home. A new build house’s repairs and maintenance needs are different from a fifty-year-old place. So when you are shopping for your home, make sure you take that into account with your buying budget. An older home will likely have more repairs, updates, and maintenance issues that may drain your budget faster.
• Educate yourself. Another way to cut down on the costs of home repairs is to learn how to take care of them yourself. There are many resources available for homeowners to use to educate themselves on basic home repair and maintenance. You can research solutions online, check out homeowner repair manuals, or even take basic repair and maintenance classes. With these tools, you can handle repairs and save money on your home expenses. Gaining this knowledge can empower you as a homeowner and help you take pride in maintaining your home.
• Buy a house with a warranty. Another option that may be attractive for new homeowners is to buy a property with a homeowners warranty. These types of warranties are typically for newer-built properties, and they cover repairs and replacements for the home, like appliances or furnace systems. You may have to pay additional fees for your warranty, but it can give you some extra peace of mind that repairs and replacements will be taken care of when they arise.
• Get financing to address large-scale repair or renovation issues. At PRMI, we offer two options that may help if you buy a property with significant repair or renovation needs. One option is a renovation loan that lets you finance the cost of your repairs and mortgage into a monthly payment. This is an excellent option for buyers interested in older homes that may need significant work upfront. Another option is a one-time-close construction loan. This type of loan is designed to allow you to finance the purchase of land and the cost of building your home into one monthly payment. It’s a great option if you want to start with a newly built property to lower your home repair and maintenance costs.

Home repair and maintenance is a challenge for many first-time homebuyers. But with the right tools in place, it shouldn’t keep you from becoming a homeowner. So if you’re ready to take the leap and buy your first place, contact your local PRMI loan advisor for help!