Buying a new home is one of the most biggest financial decisions of your life. Many first-time homebuyers assume that such a decision involves going all-in. However, buying a house in Maine does not mean that you have to overextend your finances. There are ample ways you can buy a home without busting your budget. With a bit of patience, research, and practical consideration, you can buy your dream home.
1. Evaluate your finances:
firstly, evaluate your current finances. You need to add up all of your current monthly expenses and compare them to your monthly income. Once you assess how much you are earning and spending each month, you can determine cost-cutting opportunities to boost your savings. Remember that evaluating your financial health means also looking at your credit score. One of the greatest ways to proactively prepare for buying a house is to get preapproved for a mortgage so you know approximately how much your mortgage payment would be for a house in your budget metrics.
2. Start saving early:
as early as you decide to jump into homeownership, it’s time to boost your savings. When you buy a home in Maine, you will have to come up with a downpayment, which is usually between 3 to 20% of the home’s purchase price. In addition to saving money for a down payment, save money for the additional cost associated with purchasing the new house. Find out how much you would need to save each month to achieve your goal.
3. Build an emergency fund:
having a solid emergency fund is an excellent idea for anyone, but it is crucial than ever once you own a home. Unexpected costs come up all the time, from a burst pipe that you have to fix away to a new roof you will have to buy a few years down the road. So the time to start boosting your emergency fund is not once you have already purchased the home-it’s now.
4. Plan for extra cost:
buying a new home is expensive. Considering the number of responsibilities, many buyers don’t realize how many additional costs are associated with the process. The expense quickly adds up from moving costs and renovation after the purchase to repairs and replacement costs. One way to keep your finances in control is to plan these expenses into your budget. Setting aside a significant amount that would typically be routed to the listing price allows you to have an excellent budget for quick costs such as replacing your roof or buying new appliances.
5. Choose an experienced real estate agent:
you don’t want a real estate agent who doesn’t have your best interest in heart and is a novice in the real estate market. An experienced property buyer agent will scour the market for homes that meet your requirements and guide you through the complete home buying process. You can get agent referrals from family, friends, and other homeowners. When interviewing to a potential real estate agent, ask about their experience helping first-time homebuyers in your market and what strategy they have to help you find a home.
6. Pick the right house and neighborhood:
measure the pros and cons of different homes according to your lifestyle and budget. A townhome or a condo may be more affordable than a single-family home, but common walls with neighbors will mean less solitude. Also, budget for homeowners association costs when shopping for condos or houses in planned or gated communities. Another option you can choose is considering buying a fixer-upper- a single-family home in need of updates or repairs. Fixer-uppers typically sell for less per square foot than any move-in-ready homes. However, you may need to budget extra for repairs and renovations.
7. Purchase less than you can afford:
although it is wise to avoid going over the budget, you are not bound to spend every bit of your budget established budget. If you have a maximum budget of $250,000, search for the homes in the $200,000-$225,000 range. This approach will allow you to remain competitive in the event of a bidding war without extending your finances. Moreover, imagine buying a house and still having as much as $50,000 to spare. You can easily divert that towards remodeling, repairs, or even save that for a rainy day.
8. Negotiate with the seller:
negotiation is part of the home buying process, and it can come in many different forms. You can save money by asking the seller to pay for repairs in advance or lower the price to cover the cost of repairs. Also, you may ask the seller to pay some of the closing cost, but keep in mind that lenders may limit the portion of closing costs the seller can pay. Work with your property buying agent to understand the market and strategize accordingly.
The bottom line
Now that you have understood the complete process of buying a home, you can implement these tips and buy your dream home without busting your budget.