Buying a house is a thrilling and dreamlike process. While searching through the listings on your favorite real estate site or sifting through endless photos of gorgeous properties, you can’t help but fantasize being in that humble abode, making it your own.
Record scratch! Not so fast, there—before you can plunge into the glorious phase of planning where you’ll put your favorite armchair and what IKEA lamp you’ll buy next, you first have to find a house within your budget.
While not half as glamorous as your HGTV play-acting, this process is essential for your short-and long-term financial (and mental) health. Be sure to follow our top four tips for finding that perfectly priced home.
#1: Budget for the Future
Don’t just buy a house with your current cost of living in mind, especially if you’re young. After all, you might just run into some unexpected bumps on the road in the future—or should we say… baby bumps.
That’s right, whether it’s starting a family, buying one too many pets, or recovering from a natural disaster, both beautiful and tragic things can change your life in the years to come—and there’s a chance they’ll make your once-affordable mortgage no longer so accessible.
To avoid this, sit down with your partner (or the mirror, if you’re buying this house by yourself) and make a list of all the life events or unexpected financial emergencies you might encounter in the coming years. Craft your budget accordingly to ensure you can afford it for years to come.
#2: Look Beyond the Down Payment
Buying a house costs far more than its down payment. Along with that price tag comes a host of monthly and yearly costs that you must consider when calculating your budget. Even if you can afford the down payment on a home, you might not be able to handle the mortgage payments. Or, you might not have good enough credit to get pre-approved for that property.
No matter what, use this handy home affordability calculator to see what you can realistically afford. This useful tool will ask for the following information before generating your ideal housing budget:
- Your annual income
- Monthly debt to lenders
- Mortgage interest rate
- Your credit score
- Length of mortgage
#3: Start Saving ASAP
Saving for a home is no easy feat. Suddenly, you’re not just stashing a few extra bucks for unexpected emergencies or a fun splurge—now, you have to worry about a big down payment and years of loan repayment. While these costs are part and parcel of homeownership, they are made far easier when you start saving far in advance.
To do so, reduce your spending through the following tips and tricks:
- Don’t order-in through delivery apps—from service fees to delivery fees, these added dollar bills can make fast food cost as much as a five-star meal (and we all know that McNuggets are not worth it). Instead, follow some simple carb-filled recipes to whip up delicious home-cooked meals instead of eating out.
- Cancel some of the subscriptions that you know you aren’t using, and likely won’t start to any time soon. Whether it’s multiple music subscriptions or premium channels, these monthly costs are a common waste of money.
- DIY some of your own home decor instead of splurging on overly priced new pieces. Spray paint thrifted picture frames, embroider some canvas art, or re-upholster that dusty couch!
Remember, living within your means does not mean living blandly—by following these tips, you’ll be living well, without breaking the bank.
#4: Work with a Real Estate Agent that Respects Your Budget
Most of the time, your real estate agent has your best interests at heart. However, you should stay wary of the tantalizing allure of some top-notch commission on a property beyond your budget. Make sure you communicate your budget, boundaries, and must-haves clearly to your real estate agent, and resist any entreaties on their part to show you costlier houses.
Always remember that you can rise in life and purchase a more expensive house later. For now, this is your budget, and you’re sticking with it!
To avoid any needless heartbreak over a house outside your price range, follow these tips:
- Don’t engage in a bidding war. There are plenty of houses in the real-estate-sea, and no one property is worth that sort of price hike.
- If you fall in love with an aspect of a house that isn’t on your original must-have list, sleep on the property before making any rash decisions. If it’s out of your price range, stick it on your dream home vision board and move on to the next one.
- Review potential listings—with their prices—prior to touring homes. That way, you’ll only tour properties within your price range.
With expert planning and some self-restraint, you’ll have everything you need to find the perfect place for the beautiful years ahead (without putting you in more debt than you can afford).
Keep Calm and House-Hunt On
No matter what your budget or house-hunting goals are, just remember to enjoy this process and do some breathing exercises. Searching for your dream house should be fun, exciting, and inspiring. If you plan well and communicate your needs clearly, your house search will be as painless and peaceful as the lovely memories to come!