You have finally decided that it's time to buy a home, but somehow, every home you like turns out to be way more than you can afford. As many others out there, you must make it work with the budget you have, and no matter how many times you are disappointed, never settle for just ANY home only because the price is right. To land an awesome home, you’ll just have to turn a blind eye on things that come secondary and focus on what truly matters.
There’s a difference between a tight and a too tight budget. If you’re really stretching yourself to afford a down payment or the monthly mortgage amount, you could easily find yourself being house poor. Work on improving your credit score first to qualify for a decent mortgage and try to save more than the 5% minimum for a down payment to get lower interest rates. Cutting costs wherever you can is key when money is tight.
What Is and Isn’t Negotiable
You probably will have to compromise with yourself on what is essential and what you can and cannot live without. If your life-long dream is to have a gourmet kitchen or a spa-like ensuite in the master bedroom, don’t skimp on it, but know that you might have to give up a huge terrace or a fireplace in return.
A tight budget doesn’t mean your only option is a money pit or a home that doesn’t meet your needs. If you are a 4-member family, a one-bedroom is, of course, a no-go, no matter how beautiful and affordable it is. Consider what your number one priority is; if it’s size or location, sometimes you can’t have both in your price range. You will probably come across gorgeous homes, but not in the most convenient location. It may not be worth the extra mileage if you have children that need to be close to schools, day-care, or extracurricular amenities.
Reducing your list to the must-haves will make it easier to look for a home that functions well for you and your family.
Discuss Options With Your Real Estate Agent
Once you know how much you can borrow, inform your real estate agent on the price range you can target, as well as on the must-have features and amenities. A great agent won't push for more expensive homes presenting you only with the homes you can afford. These homes may not be exactly what you’re looking for, but don't let dated furniture, colors, or wallpaper etc., influence your decision. If the home is of the right size, in good condition and in a decent location, don't miss out on it just because the seller didn't bother to prepare for the sale. Focus on the potential of a home and not on the aesthetics which can be changed to suit your taste at a later date.
For those who already have a home and are interested in budget-friendly updates, read our post on Easy Weekend Reno Projects.