How to Find an Affordable Home
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Seasoned as well as first time buyers are wary about home affordability, but regardless of the blighted reports of home ownership, it is a significant part of the American Dream. But the biggest question home seekers are faced with is whether they can find a home that suits their budget.
According to a recent survey, potential homebuyers between the ages of 28-34 said that they wouldn’t give up on their Netflix subscriptions to save money towards home ownership. And with mortgage rules getting stringent by the year, finding a dream home is going to take some level of compromising. That said, here are a few sacrifices you can make to help you get your dream home.
This is probably the biggest sacrifice you can make owing to the fact that the cost of homes in your neighborhood dictates exactly how much square footage you can get for your dollar. But the question you need to ask yourself is how much of cost sacrifice you need to make?
As a general rule of thumb, buy a home that is less costly, roughly 20 percent less than what your lender tells you that you can afford. By doing this, you’re basically bumping your budget by an additional 20 percent, which ensures that you will never be drowning in debts each month.
Another big sacrifice is cash in the bank, and once you have added 20 percent to
your budget, you automatically lower your monthly payment with a smaller loan, no PMI (Private Mortgage Insurance) and a much better interest rate.
Who doesn’t want a home in a swanky neighborhood, walking distance to the beach, but this may not always be possible. In fact, you may even have to give up the proximity to dining, shopping and recreational areas in order to comply with your budget. A great alternative is to look for homes that are close to public transportation, which will at least provide you with easy and economical access to workplaces, schools, etc.
Type Of Home
This is definitely a big sacrifice, but sometimes you may have to switch from searching for a single family home to a townhouse, condo or duplex. This may be especially out of your budget if you’re looking for homes in dense metropolitan areas. But as an alternative, you can always opt for a co-op or condo that will get you your desired address and within your budget.
Everyone enjoys backyards, with hammocks hanging from the trees and the barbeque in the backdrop. But in today’s real estate marketplace, every square foot counts so chances of finding your dream home within your budget with an expansive backyard are slim to none. As an alternative, look for a home with a great outdoor deck, and one that can accommodate a few friends and a barbeque grill.
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