Buying a Home without Breaking the Bank

 Posted on July 22, 2013 in Real Estate

There are many reasons you may decide to buy a home or you may decide not to buy homes. All of these reasons are valid and important to the purchaser. Sometimes it's as simple as not being ready or not having the budget they would like. If you are in this boat, you may be wondering what you can do to know if you're ready to buy a house or not. 

Budgeting

If you are looking at buying a home or if you should buy a home, you may need to look at your budgeting while you're renting or living in your current situation. If you are renting, you can probably purchase a home that is going to offer payments close to what you're already paying for rent. This will only work if you are keeping up with your rent easily.

Your rent is easy to compare to a home loan payment. The reason for this is most mortgages offer payments that are low if you find a home that is within the right budget. So if you're already paying rent for a home, it's easy to say that you can probably afford to buy a home that offers payments within the same price range.

If you are not renting, but living with someone else, you should look at what you have saved and what you could afford to spend on monthly payments. If you have a lot of money saved, you'll have a down payment and be able to afford a larger more expensive home.

Another option if you are living with someone else and have a reliable job,is a home that requires payments on a steady budget. You can take your monthly income and determine an affordable monthly payment.

Home Prices

When you're looking at home prices, take into consideration the amount of repairs that may need to be done when you're looking at the mortgage prices. This way you won't get into anything that's going to be more than you can afford and that won't work for you and your needs.

Pre-Approval

If you are serious about buying a home, or even looking into it, then you should look at your preapproval status. This can be as simple as going to the bank with your paperwork and income statements to see what they would be able to approve you for. This will also help you to understand what your budget needs are.

Knowing what a bank or Mortgage Company would likely approve you for before you start looking at buying a home is good so that you'll know what you need to save for a down payment and what your potential monthly payment could be.

When considering buying a home versus renting, there are many factors that come into play. You don't want something that's going to be harder than what you can handle or that's going to cost you more than you can afford. Discussing the options that you have with an experienced Illinois real estate attorney can make the process easier and less confusing.