How Much Money Do You Need to Buy a House?

by Silver Spoon Properties & Lending 04/14/2019

The amount of money you will need to ensure you can purchase a house varies based on a number of factors. For example, if you want to purchase a house in a big city, you may need to save more money than you likely would require to buy a residence in a small town. Meanwhile, your decision to choose a fixed-rate mortgage over an adjustable-rate mortgage – or vice-versa – can impact your monthly housing costs. And let's not forget about the costs of home utilities like electricity and water, either.

Ultimately, it helps to put together a homebuying budget before you embark on a house search. Because if you know how much money you have at your disposal, you can map out your house search accordingly. And as a result, you can minimize the risk of spending too much to acquire your dream residence.

Let's now take a look at three tips to help you craft an effective homebuying budget.

1. Evaluate Your Current Expenses

An in-depth assessment of your current monthly expenses is key. If you conduct an expense evaluation, you can find out how much you spend on various must-haves and wants. You then can take steps to reduce your monthly expenses and increase your savings for a new home.

It also never hurts to consult with a financial planner. If you have a financial planner at your side, you can gain expert insights to help you evaluate your current expenses. Plus, you can work with a financial planner to determine the best course of action so you can eventually buy your dream residence.

2. Get Pre-Approved for a Mortgage

Meet with a variety of banks and credit unions and explore your mortgage options – you will be happy you did. If you assess your mortgage options closely, you can find one that complements your finances. And once you get pre-approved for a mortgage, you will know how much you can spend on a house.

Generally, it is beneficial to meet with as many banks and credit unions as you can. If you consult with myriad lenders, you can receive extensive insights into many mortgage options. Best of all, you will be better equipped than ever before to find the lowest-possible interest rate on a mortgage.

3. Consider Your Down Payment Options

The down payment required for a home purchase varies, but it commonly ranges between 5 percent and 20 percent of a house's total price. If you account for a down payment as you craft a homebuying budget, you can use this total to plan ahead for the property buying journey.

Lastly, you may want to collaborate with a real estate agent as you prepare to launch a home search. In addition to helping you find your dream residence, a real estate agent can put you in touch with potential lenders and offer plenty of guidance throughout the property buying journey.

Ready to pursue a home? Use the aforementioned tips, and you create a successful homebuying budget.

About the Author

Author
Silver Spoon Properties & Lending

Carlo Honanian is the Broker and President of Silver Spoon Investments. Carlo started off his career as a Vice President with Chase Bank in the early 1990s with extensive experience in residential and commercial loans, banking, compliance, human resources, sales, clients services,and branch management. Carlo’s real estate career was added to his portfolio of expertise and services in 1999 and has continued on till today. Carlo takes great pride in listening to his client’s needs and providing outstanding service with integrity. Getting training in extensive management skills and superior customer service by one of the top banking institutions around, Carlo has carried the same mentality to the field of real estate and financing in creating and operating Silver Spoon Properties and Lending. Carlo’s vision for creating this company was simple, to be a one-stop-shop for clients to handle all of their real estate and lending needs. Carlo’s extensive experience in loan origination, real estate sales, bank management,and clients services is a distinct advantage to his clients. With the broad knowledge and understanding of residential and commercial real estate and lending, added with a tremendous focus on providing superior customer service and experience is what you can expect with Carlo and Silver Spoon Properties and Lending.

Silver Spoon Properties and Lending is also a Certified Short Sale & Foreclosure Brokerage (SFR) through the National Association of Realtors. Take advantage of our experience and training in dealing with the Short Sale and Foreclosure market today. Please call us today to discuss buying, selling, or financing your property or for a free consultation to discuss your individual scenario. We also offer property management and leasing services. Whether you are a first time home buyer or a seasoned property investor, we can cater to you specific needs. Consider us your one stop shop for residential and commercial real estate sales, loans and financing options like SBA, Commercial, Hard Money, and Residential Mortgages.