Cost Of Living
The ongoing cost of living has to be considered in your house buying budget, before you spend too much. Allow for some money to be left over to cover all the incidental and ongoing costs.
Usually the first stage of home ownership is the most financially demanding, because you’re over the euphoria of finally getting your own property, and then the regular costs start arriving. This ongoing cost of living can include:
Most financial institutions give you an option of paying fortnightly or monthly. Many experts recommend paying fortnightly because there’s one extra payment per year so you pay off the mortgage slightly faster and there fore pay less in interest over the life of the loan. It’s also easier to budget when the payments are the smaller fortnightly amount, than a with a larger monthly withdrawal.
Typically demanded four times per year.
Most financial institutions require house and mortgage insurance. The house insurance is in case there’s a major fire or earthquake etc. That could destroy your home. Mortgage insurance is in case you die or have a major calamity that stops you paying the mortgage.
Typically is higher in winter due to heating.
Many New Zealand Local Council’s have water metres installed, so you pay for your water by the cubic metre, usually monthly.
Repairs and maintenance –
There’s too many things that may need to be repaired to list, but it’s a good idea to have savings or part of your mortgage that can be redrawn in an emergency situation. When you inspect the house you will need to consider any major repairs such as roof replacement if for example you’ve got a rusting corrugated iron roof cladding. Rotting timber is another nasty problem that’s often concealed behind the wall lining.
Ongoing list of what you want to buy –
Interior decorating, new appliances, landscaping for outside, the list could go on, but in the early stages it’s best to build a cushion of savings (at least $5000) for the unexpected cost of living bills, such as car repairs that can suddenly need to be done. Then have a priority list of wants and work your way through it as finance and time permit. Be careful with all those little spends on coffee, lunches, shoes, clothes etc. That can quickly shrink your savings.
Find A Home – What Do I Need Versus What I Want
Go back to the start of Buying A House Guide
House Buying Guide page order:
1. Pros And Cons Of Owning Versus Renting.
4. Cost Of Living Once You’ve Moved In. This Page.