While many people dream of buying their own homes, not having a lot of money on hand can sometimes make that difficult. Fortunately, there are ways to find a home that’s within your budget and fits your lifestyle to perfection. There are even government programs that can help. Consider the following steps to make home buying on a budget a little easier.
Calculate Home-Buying Costs
Buying a home would be a lot simpler if there was just a one-time sticker price on the home, and that’s all you had to worry about. Unfortunately, there are many costs associated with buying a home. These include one-time costs and ongoing costs.
One-time costs, such as the down payment, are often your biggest hurdle. A good rule of thumb is to save 20% of the home price for the down payment. If you are not capable of doing that, the government offers a program you can use called FHA (Federal Housing Administration). Banks issue these loans, which are then insured by the FHA. Typically, you can get a mortgage at a low interest rate by paying as little as 3.5 percent for the down payment. This makes buying your first home much more affordable.
You also have to calculate ongoing expenses, such as the mortgage and day-to-day fees. There are also closing costs you need to account for, including an appraisal fee, mortgage insurance, application fee, and homeowners insurance.
Once you have calculated all of the above, you’ll have an idea of the maximum sticker price that’s within your means.
Opting for a Fixer-Upper
After calculating the costs and finding out how much you can afford, consider buying a fixer-upper property. You can find Plymouth real estate at a lower price that just needs a little renovation and TLC. However, you need to be extremely careful when buying these properties because they pose a lot of risks. You may buy a property that looks structurally sound, for example, when in reality there are severe problems with the foundation.
Avoid these headaches by having a fixer-upper, and any home for that matter, inspected by a professional. They will let you know where the problem areas are. Take these problems to a licensed contractor so you can get an estimate as to how much the repairs might be. If they cost more than the property itself, it may be best to keep looking. Additionally, look for homes that just need cosmetic fixes, such as paint or carpet issues. These problems can be addressed quickly.
Just because you don’t make a lot of money, doesn’t mean you can’t find a quality home for you and your family. It just takes a little planning and insight to find a property that fits your needs to a tee.
See more articles pertaining to buying Plymouth, MN real estate in the section of articles on Plymouth Real Estate just below Lake Minnetonka Real Estate Categories in the column to your right. And remember, we also post tips daily on Twitter as well as Facebook and and we’d love for you to follow us there.