How to Stay Within Your Budget When Buying a House

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Buying a new North Shore Chicago house is something that you should carefully plan for. It involves a significant amount of money that could entail having the right amount of budget that will match a home that passes your needs, requirements, and specifications. Setting up a budget, however, is just half the battle; you need to stick to it no matter what. Here are some valuable tips and reminders that will help you stay within your budget when purchasing a house.

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  1.    Have a Firm Price Limit – one of the first things you should come up with is a firm price limit that you will follow. This is crucial considering that a good number of home buyers tend to spend more than what they can really afford. This happens when their bank gives them a number that they can “spend.” However, this may not be true all the time. Your bank may tell you that you can spend $400,000, but their estimate may not really match what you truly can afford once your other financial obligations come into the picture.

One good tip that you can consider is using an online mortgage calculator. This way, you will be able to chart the key elements such as the home’s sale price, the price of a loan term, and the interest rate, which will then be broken down into your monthly payments. Once you have arrived at a monthly amount, you will have a better picture if you can truly afford it or not.

  1.    Keep Watch of Your Agent – though having a Lake Bluff real estate agent by your side will usually help you in your search for a home, you still need to examine their strategies to see if they are still aligned with your ultimate goal. There are some agents who offer properties that may be appealing upon face value but are already beyond your financial capabilities. They will try to convince you to go for these properties which may leave you in a tight spot.
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  1.    Stop Comparing – another good tip is to stop comparing yourself to other home buyers. If your budget only allows you to spend $300,000 max, do not compare yourself to your friend or officemate who has a $400,000 budget. He will likely be able to afford more in terms of amenities and other add-ons. Instead of looking at things that you don’t have against what they have, just focus on building up your finances so that you can eventually buy the necessary items and other improvements in your newly-acquired home.

Rather than obsessing over the fact that your friend bought a house with an outdoor kitchen, offer your congratulations, and then get excited about what your $250,000 budget can do for you. Maybe you’ll have four bedrooms instead of two, or you’ll have a gas oven instead of an electric one. Then, think about the ways you’ll benefit from staying within your budget, such as maintaining a healthy vacation or retirement fund or starting a college education fund for your kids.