Everyone dreams of their perfect home with expansive space, perfect upgrades, and stellar styling. But, most times, the ideal home of your dreams with everything you’ve ever wanted will also come with a hefty price tag. Use the guidelines below to ensure your eyes are not bigger than your wallet when it comes to your house hunt.
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- Is there enough space for you to grow into?
- How much will you put towards the down payment?
- Are you spending more than 25-30 percent of your income on the mortgage?
- Are there additional housing fees like maintenance fees, a homeowners association or utilities?
- Will the cost of the home limit your lifestyle?
Is there enough space for you to grow into?
One of the most important factors when searching for a new home is finding a space you can grow into. It should be comfortable in size for your current lifestyle, but also be able to adapt and function for any changes that occur over the next several years. Consider how your life may change in the future – maybe you will get married or have children, or perhaps you would like to renovate the space eventually. Make sure to take into consideration how you can change and grow within your new space so that it will suit both your current and future wants and desires while still falling within your budget.
How much will you put towards the down payment?
Experts recommend putting at least 20 percent down for the down payment on your new home. Doing this prevents the buyer from needing private mortgage insurance and will result in only paying the monthly payment instead of additional fees. If you don’t have the 20 percent saved up, there are alternative options to consider, but ensure you are not purchasing outside of your price range.
Are you spending more than 25-30 percent of your income on the mortgage?
Financial experts recommend not spending more than 30 percent of your taxed income on your housing, whether it is rent or a mortgage. Spending more puts you in jeopardy of financial strain on things like other bills, food allowances, and extra spending money.
Are there additional housing fees like maintenance fees, a homeowners association or utilities?
Make sure you have considered all of the costs associated with your new home. Often, buying a home comes with unforeseen expenses. For example, monthly taxes, interest on the mortgage and homeowner’s insurance are all additional costs on top of the mortgage itself. Factor them into your monthly budget to make sure there are no surprise costs and that you are comfortable with the new total for all of your payments and expenses.
Will the cost of the home limit your lifestyle?
No one likes to give up any of his or her guilty pleasures and conveniences. Even with a new mortgage payment, ensure you can maintain your current lifestyle without causing overspending unless you are willing to sacrifice certain indulgences. If you are eager to give up things like dining out or regular shopping, you can contribute more to your mortgage. But if not, ensure your payment and additional costs will be affordable for your current income.
Whatever size home you decide on, you will be able to make space your own with personal touches and added flair. With these tips and strategies, strike the perfect balance between your wish list and your budget—ensure that every home on your list is well within your price range to maintain your current lifestyle while still finding the perfect new home for you and your family to grow into.