Buying a home is arguably the biggest purchase you’ll make in your lifetime. So you want to make sure you do it right! Like any big purchase, it takes time, research, and lots of preparation. And the biggest part of that preparation? Budgeting.
If you’re looking to buy a home in 2021, there’s no better time to start budgeting than right now. The following tips will help you whip your budget into shape and get the best mortgage for your money.
Download a budgeting app.
There are tons of budgeting apps out there that you can connect to your credit and debit cards. Based on your purchases, it will tell you where you spend the most and where you have some wiggle room. As an alternative, consider working with a Certified Public Accountant (CPA) for a more personalized experience. Either way, the objective here is to get an idea of your spending habits, so you can make better decisions moving forward.
Analyze the market.
Doing market analysis is critical to choosing where and when to buy a home. The market is always fluctuating, so staying on top of these trends will serve you well when it comes to making a proactive, smart decision. Check similar homes in the area to make sure you’re paying a fair price on the market. This can serve as a potential bargaining mechanism if the home you’re looking at is more expensive than other homes in the neighborhood.
Save up for a deposit.
Many lenders require a 20% deposit to seal the deal. It’s a big chunk of change, but having that deposit ready will improve your chances of getting the mortgage approved. Take a look at what the total estimate is for your potential home, and create milestones for yourself to help save up that 20%. For example, if you have 10 months until the deposit needs to be paid, and the deposit is $20,000, consider dividing that $20k by 10 — meaning you work to save $2,000 each month.
Pay off any debt.
Ideally, you want to go into a mortgage with zero debt. In fact, debt is a big indicator to lenders that you aren’t financially stable or responsible enough to afford future payments. This could dock you in the mortgage process, and decrease the chances of mortgage approval.
Determine monthly housing expenses.
In addition to reviewing your daily expenses like food, entertainment, etc., make a list of your monthly housing expenses like utilities, insurances, bills, and more. These expenses amount to much more than people typically realize, and take up a big chunk of your overall monthly budget.
Consider pre-approval like your “first impression” when you meet people. It’s your chance to put your best foot forward, and get the process started off on a good note. A pre-approval serves as that first impression, and you’ll be taken more seriously knowing you are ready to go ahead of the sale.
And the biggest hassle of all when it comes to buying a new home? Selling your old one! With Home Buyers Express, you can take all the worries of selling your home and put them in our hands. We buy homes for cash, and all it takes is four simple steps. Visit our “how it works” page for more information, and contact us today!