Hello World! Welcome Friends! So, you’re getting ready to be one of the millions of Americans who buy a home each and every year. The only problem? You’ve never purchased a home before and are a bit intimidated by the entire process.
If this sounds like you and your current situation, worry no longer because we’re here to help! In this article, we’ll tell you how to budget for a house, as well as what you can expect during the buying process.
Now then, let’s get started!
1. Add Up Every Source of Income
When planning to buy a house, the first thing you need to do is figure out what kind of money you have available. And a good place to start is to add up every source of income that your household has each month.
Of course, if it’s only you that is buying the home, this will be a simple process. But if you have a partner, or plan on buying a home with someone else, you’ll need to get their monthly income information, too.
2. Add Up Your Monthly Expenses
Next, you’re going to want to figure out what your buying party’s monthly expenses are, so you can remove those funds from the equation completely. This is also a good time to figure out what kind of a down payment you’ll have, so you can figure out what a realistic price point for a home is.
A pro tip? Always overestimate your expenses and underestimate your income. It’s a good way to create a bit of breathing room that can prevent you from getting in financial trouble down the line.
3. Leave Some Breathing Room
Again, we can’t stress enough how important it is to leave some breathing room in your finances. It’s never fun to think about, but you always have to prepare yourself for the worst-case scenario when dealing with a purchase of this size.
With this in mind, make sure you give yourself enough room to comfortably deal with any curveballs that life may throw your way.
4. Contact a Mortgage Broker
Once you’ve got all of the numbers figured out, it’s time to contact a few mortgage brokers so you can be preapproved for a loan. It’s never a good idea to go house shopping without knowing what you can and can’t afford, so it’s wise to do this before doing any searching of any kind.
Also, stick to your budget and don’t think you can talk a homeowner down on their price. Stick with houses in your budget and avoid getting into bidding wars if you can.
5. Try to Keep an Open Mind
Once you do finally start looking at houses, try to keep an open mind about everything. Sure, you may have your ideal dream home in mind already. But don’t avoid looking at other viable options just because, on paper, they don’t fit what you think you want at the moment.
Who knows, you may find out your dream home is absolutely nothing like what you thought it would be like!
6. Be Prepared to Make Sacrifices
Regardless of what kind of a budget you’re working with, odds are you’re going to have to make sacrifices somewhere in order to get a home in your budget. Understanding this early on can help you more easily find something that fits you and your family’s needs, which of course, is the overall goal here.
7. Make a List of Must-Have Features
A good way to figure out where you can and can’t afford to make sacrifices is to make a must-have features list for your home. Rank these features in order of most important, that way you can have a checklist you can use for each and every home you look at it.
8. Plan for the Future
If you’re getting ready to buy a home, odds are you plan on staying in for some time. That means that what you need right now might not be what you need in ten years.
In order to future-proof your home, you need to shop for a home with the future in mind. For instance, you may only need three bedrooms now, but if you plan on having another child down the line, getting that extra bedroom may be worth it.
9. Don’t Be Afraid of a Fixer-Upper
A good way to get a lot of home for a lower price is to get a fixer-upper. And we get it, nobody wants to buy a home that needs tens of thousands of dollars worth of work. But oftentimes you can find a home that fits what you need, but also needs a bunch of work cosmetically, so it’s more affordable.
Simply put, don’t be afraid to put a bit of work in to make your dream home a reality. Especially if that work is something as simple as getting new carpet or painting some walls.
10. Trust Your Real Estate Agent
Last but not least, it’s important to discuss that, when buying a home, you’re not alone. You’ll be working closely with both your mortgage broker and your real estate agent to make sure the process goes smoothly.
Your real estate agent, in particular, is someone you should trust and lean heavily on. They know the area, the housing market, and can help you get the best deal for you and your situation.
Buying a Home: How to Budget for a House
Well, there you have it! That is a basic guideline that you can follow when buying your first home, including basic tips and tricks on how to budget for a house.
As long as you follow these tips closely, you should find that the home buying process isn’t as scary or as difficult as you may have previously believed!
Getting ready to buy a home? Check out our blog for more information on how you can make sure you do things the right way!
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Toodles,
I’m actually starting to save up now, I hope that I could follow through so that I’d be able to buy my own house as early as possible, although it’s hard I wouldn’t want to pay rent forever.