If you are first time home buyers you might be wondering what you can do to get the best house for the best price. Too many people worry that when they purchase a house they will overextend themselves and become house poor. This is a real concern, which is why you should preparing yourself for some things. Here are some things you should know:
1. Set A Budget And Stick To It
Before you even go to the bank to get the loan, you need to decide how much you want to spend on the house each month. The cost of your mortgage is just one factor in the house, so you need to decide on this early on and then stick to it. The reason this is so hard is that in some cases the lender will offer you more money than what you thought. You may have decided you would buy a $200,000 home and the bank came back telling you they would loan you $300,000! This gets people excited thinking that they can afford a bigger house. Just because the bank is willing to loan you that amount doesn't mean that you can afford that amount. You know your budget, you know how much money you want to spend on house payments each month, so don't let what the bank tells you change what you are willing to spend. Instead, choose a budget and don't vary.
2. Think About The Upkeep Costs
Each house has a different set of things it will need to keep it up. An older house will probably be less energy efficient, so you should plan on spending more on utility bills each month. It is also more likely to have problems with their appliances, such as the water heater so you may have to replace that, and there will be things that need to be fixed along the way. So you need to consider that.
However, a new house also has costs. You may need to put in the yard, by appliances, paint, finish the basement, purchase blinds and so forth. So each of the options are going to have more costs associated with them than just the house payment each month.
When you are house shopping realistically consider just how much you are going to spend on these things. Otherwise, when you get into the house you will be surprised to see just how much money you are spending each month on extras, but if you are planning for this you can choose a house that is more in your budget so you have extra cash.
By knowing these things you can protect your budget when buying a house.
