Finding and buying an affordable home is a big task for buyers all across the country—and rightfully so! Picking out your new home is an important part of the process, but figuring out if you can reasonably afford it is just as crucial.
Don’t worry, however; finding a home you both love and can afford doesn’t have to be a challenge. Below, we will be looking at the five key ways you and your real estate agent can work together to figure out if a home is within your reach.
Know your budget… and your finances
It’s always a good idea to establish a set budget before embarking on the home search. This allows you to look for homes that you can reasonably afford—without spending time looking at homes you just don’t have the resources for. A well thought-out budget is a great way to narrow down the homes in your search as well.
However, simply knowing your budget isn’t enough. Before searching for a home and getting into the process, take some time to really know and understand your financial situation as a whole. This is good for avoiding surprises and uncertainty down the line when questions such as “Can I afford these payments?” or “Is this too far out of my budget?” inevitably come up. Have a budget, but be prepared to reason and juggle around with it, should the time come.
Prepare for mortgage payments
If you know about how much your new home will cost or should cost, why wait to start making mortgage payments? Doing so before you need to can serve as a great practice method to get you used to making bigger payments upon purchase—and it can help you develop a pool to pull from should you ever need help making a payment.
Consider a fixer upper
It’s an age old solution, but it is worth considering! A fixer upper home can be drastically less expensive than other homes on the market—but it might have just as much potential. If you have a mind for “DIY” and can reasonably afford improvements down the line, moving into a more modest home can allow you to save now and benefit later on.
Learn about (and expect) possible expenses down the line
No matter your financial situation, it’s always a smart idea to work closely with your real estate agent and air any questions or concerns about finances that you may have. Your agent can help you predict what expenses may come up later on, and what you should be planning for now. Without this insight, you might settle on a home you can “afford”—only to realize there are surprise fixes to make that will end up costing you more. A real estate agent’s guidance can provide you with the peace of mind you need to make sound financial decisions.
When it comes to finding an affordable home, don’t let your finances scare you—let them empower you! By going into the process with a clear mind and understanding of what’s to come, you will be well-equipped to handle your purchase easily and responsibly.