Congratulations on your new home! Becoming a homeowner is an exciting milestone, but it also…
There’s no denying that today’s housing market is expensive. With prices increasing dramatically in the past few years, many potential homebuyers are left wondering if they’ll ever be able to afford to purchase a home. Here are some ways that you can budget for homeownership even in a crazy market.
Consider Your Needs
If you had your heart set on a large home with plenty of bedrooms, you may want to consider something smaller or older that is better priced. Unless you need the space for a large family, a smaller home can be a great option. Not only are the often cheaper, the maintenance and upkeep are usually less as well. With fewer rooms to furnish, you can also save on added costs like furniture and décor.
Smaller homes aren’t always less expensive, however. Area, amenities, and association fees all pay a role.
Buy a Fixer Upper
Are you handy? Getting a home that needs a little bit of work can help you afford homeownership faster. Just keep in mind that fixing up a home costs money as well. Some loan products allow you to incorporate these costs into your mortgage, although you will need to hire and work with a general contractor to do that. If you want to DIY, plan to cover renovation costs yourself.
You can buy a home and get roommates who pay rent to offset some of the costs. Buy a duplex and renting out one side is another great option for keeping your monthly expenses down. You will still need to qualify for the mortgage on your own and some lenders will not include the projected rent in their calculations. Talk to your lender about options for doing this that can make sense for your financial situation.