There's No Place Like Home: Steps to Take When Buying Your First Home

WASHINGTON, April 9, 2014 /PRNewswire-USNewswire/ -- Preparing to buy your first home is one of life's most monumental steps. As with other milestones, such as getting married or having a baby, new homeowners must face the financial realities that come with investing in a home of their own.

Certified Financial Planner Board of Standards ("CFP Board") Consumer Advocate Eleanor Blayney, CFP^® provides guidance on the "realty realities" that all new homeowners should be prepared to address.

"Your first focus, no doubt, will be on those new mortgage payments, and reworking your monthly budget to carve out the needed funds," says Blayney. "However, the demands of home ownership don't stop there. A home is a real asset that requires attention from you, its new owner." 

In the latest installment of CFP Board's "Let's Talk Planning" blog and its "Financial Planning is for Everyone" series, Blayney shares three aspects of home ownership to consider when you close on and get the keys to your new home.

1. Titling your home: There are several ways to own a house. What's best for you depends on several factors:  For example, are you the sole purchaser, or are you buying it with another individual? If it's just you, make sure you have a will to direct where the house should go in the event of your death. If you will be a co-owner, the important question is whether you want the home to automatically transfer to the other individual at your death.
2. Insuring your home: If you have a mortgage, you must have insurance, but you do have choices about the kind of protection you buy. Homeowner's policies differ with respect to the types of perils they cover, such as whether they include what's inside your home and the monetary benefit you would receive if your home is destroyed.
3. Maintaining your home: No more calling the landlord when there's a water leak or the dishwasher dies. You need to plan for these events by setting up a "repair" account and funding it monthly. Once you move into your new home, get the names of some reputable contractors who do good work at reasonable costs.

Homeownership comes with more than enough new responsibilities. Blayney recommends two options new homeowners need not consider: mortgage insurance and bimonthly payment plans offered by the mortgage servicer. Mortgage insurance only makes sense it you cannot qualify for traditional life insurance because of health issues.  And you can increase your monthly payments on your own, shortening the duration of your mortgage and lowering your interest costs, without incurring bank service fees.

"If all of this seems complicated, good. Talk to a CFP^® professional to prepare and plan for homeownership," says Blayney. "He or she will help you focus on the important issues of owning a home: protection, preservation, and a plan for transfer. Your investments may do just fine without your constant attention, but not your home."

ABOUT LET'S TALK PLANNING
"Let's Talk Planning" is a blog by CFP Board Consumer Advocate Eleanor Blayney, CFP^®, with posts each week with practical financial planning tips for consumers, as well as insights into the latest developments at CFP Board.  In addition to offering counsel on timely and evergreen financial planning topics, once a month Blayney will remind readers that "financial planning is for everyone," with tips for consumers of all ages and life stages.

ABOUT CFP BOARD
The mission of Certified Financial Planner Board of Standards, Inc. is to benefit the public by granting the CFP^® certification and upholding it as the recognized standard of excellence for competent and ethical personal financial planning. The Board of Directors, in furthering CFP Board's mission, acts on behalf of the public, CFP^® professionals and other stakeholders. CFP Board owns the certification marks CFP^®, Certified Financial Planner™, CFP^® (with plaque design) and CFP^® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.  CFP Board currently authorizes more than 69,000 individuals to use these marks in the U.S.

SOURCE CFP Board