If you are planning to buy a home, one of the first things you need to do before you even start looking at houses is to figure out your budget. Doing this in advance will keep you from overextending yourself, and it will help you stay realistic while you conduct your home search, as well as prevent you from getting attached to a home that is beyond your price range.
When figuring out your budget, don’t forget that on top of the asking price of the property, there are also a lot of other expenses that come with buying a home. These include the down payment, closing costs and the cost of getting a home inspection. Lenders typically look for five to twenty percent of a home’s asking price as a down payment. Closing costs are around two to six percent of your mortgage amount, a home inspection can cost anywhere from a few hundred dollars to over a thousand dollars. You will need to save up for all these extra expenses, or make sure you have the available funds when the time comes.
Consider also your monthly expenses after you’ve bought the house. These include your monthly mortgage payments and utilities. In these difficult times, you can’t afford not to think ahead.
Once you’ve figured out your budget, start saving now. Set a target amount and give yourself a deadline to reach it. Write down all your current expenses and see where you can cut down on unnecessary spending. This may mean eating out less, bringing coffee in a thermos instead of buying it from a coffeehouse, or taking public transportation. Try to save any extra money that you get, like bonuses or tax refunds. It would also be a good idea to keep your savings in a separate account so you won’t be tempted to spend it. It will be worth all the sacrifice when you’re ready to purchase your home.
If you are planning to buy a home, let The Incorvaia Team make the process as easy as possible for you. Call us at 440-879-7130 today!
