When you decide to buy a house, you need to first understand the big investment you’re about to make. Homeownership comes with a large amount of responsibility, and it’s important you truly understand this.
When buying your first home, you truly need to think about the finances. After all, the last thing you want to do is become house poor after you buy your first place. In order to do this, you need to find creative ways to save money on your first home, and the following tips will help you do just that.
Know what you can afford.
The very first step to saving money on your new home is to know what you can afford. Make sure you use a mortgage calculator to determine your payments. Some homeowners just assume that their mortgage broker will know what they can afford based on their income, but this isn’t always the case. Your broker looks at your gross income, not your net, and bases your home affordability off that. You want to be sure you can comfortably pay for the mortgage as well as the utilities and other costs associated with homeownership, as well as your other debts.
Everyone may dream of owning that huge mansion, but it’s important that you think realistically. Although you may dream of the mansion, it may not be the right investment for you now. If you’re single, a smaller place is perfectly fine. By downgrading on size, you can save some money, which is extremely beneficial to your wallet.
If you’re handy, you can truly save money on your first home by buying a home that’s in need of a little TLC. You’ll be surprised at how much difference paint can make, and in today’s world, you can paint everything from the walls, to the floors, to the kitchen cabinets to give something a new look. Plus, if you can do it yourself, you’ll certainly save a lot of money. To top it off, all the upgrades you make will put equity into your home, which is extremely important if you ever want to refinance or sell.
Save on shopping.
When you buy a new home, you’ll be surprised how much you’ll have to spend to furnish this new home. Some people waste so much money by buying everything brand new, but this is unnecessary. Be sure to shop for items that are on sale. Check out consignment stores and garage sales too to try and find what you need. You’ll be surprised at how you can get a touch of modern tables for your living room without having to pay and arm and a leg to get them.
Aside from furnishings, you can also save on the amenities and utilities too. For example, if you don’t watch a lot of TV, you should refrain from spending the money on cable. Instead, use Hulu or another program to watch the shows you truly love. You should also be smart about your energy use too and find ways to cut back on your gas, water, and electricity bills. The more you can save, the more affordable your new home will be.
When the economy fell in 2009, many people lost their homes. If you’re going to invest in your first home, make sure that it’s something you truly can afford. If you were to lose your job, you want to have enough in savings to pay the mortgage until you get back on your feet. After all, a foreclosure is on your record for 7 years, so it’s not something that will just go away.