Buying a home, regardless whether it is your first one or you just want an upgrade from your current property, is a major milestone. As such, it should be considered carefully and thoroughly, to avoid any potential mistakes turning into a true waste of money. One of the biggest factors in a property purchase is your budget. How much money you are willing to invest will affect your choice of the location, square footage, and other features, but saving money at any cost shouldn’t be your basic guidelines for choosing your future home. To keep the right price-quality balance, in this article we’ll discuss everything you need to know before you purchase your new home, and how your budget affects these factors.
Calculate your budget and costs
The most important question future homeowners are asking before they firmly decide to buy a property is: “Can we afford it?” To learn whether you can do that, you need to calculate your income and costs. Do you have any savings earmarked for the purchase? Write that down first. Then, write down your monthly income and subtract the monthly expenses, such as retirement plan, groceries, etc. You also need to be clear about home-ownership expenses; this includes property taxes and insurance. The savings can be maximized if you decide for a 15-year, fixed-rate mortgage.
Know your must-haves
Each homeowner has different needs and priorities. Some prioritize the size of the house. Others appreciate the proximity to schools, educational centers or social hotspots more. To figure out what matters most to you, you should make a list of your must-haves, and arrange them based on their importance. It is very difficult to find a house which has everything you need, even if you have an unlimited budget, so you need to know the features that can be the subject of compromise.
Think about a fully customizable option
If you’re worried you’ll have to make too many compromises in order to have a house that matches all your standards, you should think about building a house from scratch. This allows you to design a space that will fit you and all your family members. We can see great examples of such projects in the work of some luxury home builders in Sydney who focus on individualized and custom-made properties, instead of project homes. By building your own home, you also have a say in the choice of materials and additional features. Because every homeowner-to-be has different needs and requirements for constructing a house, it is quite impossible to state an average price. To learn that, you have to have an approximate plan and consult with the builders.
Still determined to buy? Here are the factors to consider.
If you’ve decided that building a home from a scratch is not for you, there is no need to worry. You can still find a property that meets a fair number of the conditions you set for your ideal home. The following things are worthy of your consideration when it comes to budgeting:
- Location can significantly affect the price of the property. For young professionals, urban setting is usually more popular, while families prefer the suburbs.
- A neighborhood is a narrower notion than the location, and it includes factors like safety, transit scores, etc.
- Property types to choose from are single-family homes, townhomes, part of a duplex, etc.
- Style of the home should be mostly viewed as functionality, and the aesthetics is secondary, especially if you are trying to save money.
- Older homes can be cheaper due to lack of many modern features, but they sometimes carry hidden costs of future repairs.
- Property taxes are calculated based on the property value and depending on the location, they can be quite high.
Finally, you need to be aware that it makes sense to prioritize quality instead of saving money when investing in a home. The difference in cost can often boomerang its way back to you with high taxes or repairs.