Mortgage Advice

House Hunting on an Extreme Budget

October 16, 2015

Purchasing a new home is an incredibly exciting milestone. There is no feeling quite like holding the keys to the front door in your hand for the very first time. However, taking possession of those keys also means you take on the not-so-fun elements associated with homeownership. Home maintenance, taxes and the unexpected blown boiler in winter can lead to concerns of your savings flying out the window, especially for those on limited budgets.

If you’re on a tight budget, here are some suggestions on how you can house hunt and manage some of the demands of homeownership, both expected and unexpected, after closing.

Bulk Up Your Rainy Day Fund

No matter your income, a homeowner needs the appropriate amount of cash ready–for closing and for everything after. Think of how you might handle unexpected repairs post-purchase without using credit before you begin your hunt.

It’s important to have a strong rainy day fund ready and accessible in addition to your down payment.

Plan Effectively for Renovations

The vast majority of homeowners plan for at least one home improvement project each year. However, when you move into a new home, that list can quickly grow from one project to several. It’s incredibly tempting to move in, grab the sledgehammer and start ripping out those horrible 1960s kitchen cabinets. But, each makeover project requires additional dollars. If your new home is in need of updates, there are a few options on the table. One approach would be to commit to maintaining what you have for a full year. You’ll make smarter financial decisions about what needs to be fixed upfront, how to tackle repairs and renovations, and determining what can stay. Another option would be to work with a loan officer at Ross Mortgage to see if you qualify for an FHA 203(k) loan. This special product essentially acts as a home improvement loan and allows homebuyers to bundle their home purchase along with any desired home improvements under one mortgage loan umbrella.

Know What You Can Live With and Without Once You’re Settled

Moving into a new house creates the opportunity to hit the reset button. Typical ongoing expenses can be re-evaluated or completely removed once you get settled. A great example: cutting the cord. It’s becoming more common for homeowners to eliminate the costs associated with cable television and rely solely on streaming video and television services. In fact, there are price calculators available to help you plan on the adjusted costs (and potential savings).

A home should be a source of joy for you and your family, not a wellspring of anxiety. By planning effectively, even those who don’t make a mint can still achieve the pride that comes with homeownership