Finding an affordable dream home is no easy task. Many people have expectations that houses can’t meet and budgets that make finding the perfect home unobtainable. House hunting is just like shopping for anything else. As long as you identify what you want and do proper research, you can find a home at the right price. Here are remarkable tips to help you find an affordable dream home.
8 Tips For Finding An Affordable Dream Home
- Know What You Want
Sit down and create a list of all of the things you want and need in a home. Maybe you want a yard for the kids and pets, or perhaps you want a house with at least two bathrooms. Write all of the things your next home needs to have for you to purchase it.
Similarly, you should understand the type of home that suits who you are. Many people prefer new homes because they don’t have any history, while others prefer homes with history. You should also write down the types of homes you want, from multistories to ranches.
Make sure you know whether or not you’ll be able to handle a fixer-upper or want a home that’s perfect from the start.
- Be Realistic
Now that you have all of the things you want in a home written down, it’s time to be realistic. Based on your budget, can you afford your perfect home? Even fixer-uppers can be dream homes, depending on the type of person you are. You’re not going to take everything you want out of a house; which means it may require work even if the house itself is in perfect condition. For example, you might be able to get a house with two bathrooms; but you’ll need to sacrifice a third bedroom.
- Always Do Research
With the list of features you want in a home on hand; then start looking at homes in the neighborhood you desire to live in. You can identify a few neighborhoods based on commute times, schools, price, and crime rates. Next, go to a website or real estate apps like Realtor or Zillow to look at homes available in your price range. Looking at real homes can help you prioritize; what features you need most in a home and which you can go without. Lastly, write down a list of needs and wants you to want in your house. An open floor plan? A big backyard and lawn? A movie room?
- Review Your Finances
With rents increasing, more and more people are looking into homeownership where a mortgage may cost them less per month than their apartment rent. Unfortunately, apartments are typically easier to obtain because you don’t need a hefty down payment.
Lenders usually say you can afford a house that’s two to three times your gross income. For example, if you make $60,000 per year, you can likely afford a home that’s valued at $120,000 to $180,000. You won’t know exactly how much a mortgage company will be willing to lend you; until you begin the preapproval process. Still, with this information, you can start reviewing your finances.
Take a look at your financial records and speak to lenders for prequalification, which will tell you; how much you are qualified to borrow based on your income, debt-to-income ratio, and credit score. During the prequalification, lenders won’t usually consider any additional fees; like closing costs that you’ll pay when you purchase your home, so make sure you have enough saved.
Remember, the larger your down payment, the less you’ll pay over the life of the loan, which means lower monthly bills. For conventional loans, aim to put at least 20% down on a home to obtain a loan. There are many other loan products available from lenders that require a lower down payment; so make sure to grasp your finances, so you know what options are available to you.
- Set a Timeline
If you signed a lease this month, then there’s no use looking for a home right now because you’ll have to buy yourself out of your lease; or wait 11 more months to move into your house. Similarly, there are things you might need to take care of before you can purchase a home; such as cleaning up your credit, selling your current home, or impending interest rate hikes.
Your timeline doesn’t have to be exact. Instead, consider all of the factors that can impact your ability to buy a home to determine how much time you’ll need; before you can seriously start looking and applying for a mortgage loan.
- Think About The Long Haul
Consider your plans before you purchase a home. For example, plans to stay in the home for at least five to ten years can impact the type of home you buy. Couples and individuals looking for starter homes with plans to upgrade a few years later will have different expectations about which home is their dream home and affordable upgrades.
- Work With a Realtor
Finding a home on your own is entirely doable, but realtors can make the entire process less stressful. These professionals know about more listings than Google search will tell you. You won’t pay the realtor’s commission fees when buying a home. Instead, the home seller will pay the realtor; so you don’t have to worry about any additional costs for working with a professional to help you find your dream home that is affordable.
To find a realtor, begin interviewing agents to determine who you believe would be the right person to find your affordable dream home.
- Be Patient
Several factors dictate whether you’re ready to buy a house now or not. If you have a poor credit score, then you might want to wait until you boost your credit score before; so that you can purchase a home and get the best rates. Similarly, if you want to make sure you can afford your monthly mortgage rates; you can try to save more money for a larger down payment on the home.
You’ll also need to have patience when it comes to finding an affordable dream home. It’s unlikely you’ll get home with everything on your preferences list, and even more unlikely; it will be something you consider affordable. If you don’t have to relocate right away; take some time to wait until the perfect options for you come on the market. Never feel pressured to buy a home because you want to; instead, wait until the right time.
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About Author: Matt Casadona has a BS(Bachelor of Science) in Business Administration; with a major in Marketing and a minor in Psychology. Matt is enthusiastic about marketing and business strategy also enjoys San Diego life, exploring, and music.
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