How to Avoid Homeowner Payment Shock
2 minute read
May 9, 2014


sticker shock Many Americans feel payment shock after moving into a new home. They’ve run all of the numbers with their loan officer and know exactly how much their monthly payment will be. However, when they write that first check to the mortgage company and pay their utility bills they still are taken aback. Follow the steps below to avoid your first mortgage payment feeling like a tough pill to swallow.


1- Live like you are already paying your mortgage. 

Pay the difference between your current housing expense and what your new mortgage payment will be into a savings account every month. This will allow you to know what your monthly budget will look like once you have a mortgage to pay and also help you save toward a downpayment and closing costs.

2- Estimate utilities on a home. 

If you are currently renting a 1 bedroom apartment or living in a different municipality, it can be difficult to gage how much utilities will cost on a monthly basis for a 2,000 square foot home. Ask friends and family who live in a similar type home how much their utilities cost. Contact the utility companies and ask about how much you can expect to pay each month.

3- Factor in Home Maintenance

Will you need to buy a new lawn mower? Are you planning on having a cleaning service come in twice a month? Calculate how much you’ll need to set aside for home maintenance and start doing so now. Factor in items that are in good condition now but inevitably will need replacing at some point such as a new roof or new water heater in 5 years.

4- Leave room for changes in income

Keep in mind any changes in employment or income you might foresee in the future. Often families get qualified for a mortgage based on two full time incomes. Factor in any changes that can arise that would result in a  drop in income. Being conservative in this way will allow your family to still be comfortable in their home in the future.


Of course there is no exact way to know how you’ll feel in those first few months of homeownership. However, planning ahead and having more realistic expectations won’t leave you breathless after writing that first check to the mortgage company and paying the rest of your utility bills.

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