Over Budget Doesn’t Have to Mean, Out of Reach.

October 10, 2016




img_4395Very few things in life are more exhilarating than finding the home of your dreams, but even fewer are more heart-wrenching than realizing it
is over budget and out of reach. Or, is it? If this is truly your dream home, there are some budget saving tips that you can employ to keep your budget from going bust. Here are a few ways to turn that dream home into your new home.


Budget Saving Tip #1: 
Be ready to negotiate the price

When it comes to purchasing a home, nothing is set in stone, or in this case, brick and mortar. According to Chantay Bridges with TruLine Realty in Los Angeles, “Everything is always negotiable so that you might be surprised at what sellers, agents, and buyers alike will compromise on.”



The result may not be exactly what you want, but you won’t know until you try. Sometimes a seller’s circumstances may make them more motivated to sell. If the sell is due to work relocation, marriage, or divorce, the seller “may just be looking for a fair offer and would be willing to sell to you for a little less if they can close faster as a result.”



Never settle for the idea that you can’t approach a seller who’s home is out of budget. The worst that can happen is they decline, but you could negotiate yourself right into that dream home. Put your haggle hat on, and prepare to parlay!


Budget Saving Tip #2
: Utilize existing programs

With a wide variety of programs available, specifically down payment assistance programs, many people have been able to become homeowners. Little known fact: Not all of these programs require you to be low-income to qualify. Since programs change frequently, it is a good idea to consult with your lender to learn about both your county and state-by-state options.



What if the home of your dreams happens to be a fixer upper? This could work in your favor. Sarah Valentini, president and co-founder of Radius Financial Group, suggests considering financing with a renovation loan, thus enabling “a home buyer to make desired improvements and have them financed into the mortgage.”


Budget Saving Tip #3
: Consider your mortgage options

Many home buyers don’t even consider options such as a five-, seven-, or 10-year adjustable-rate mortgage, according to Valentini. She states, “The biggest mistake I see a majority of people make is blindly asking for a 30-year fixed mortgage.” She adds, “We live in a much more transient society than we did 20 years ago, and people all too often pay for the ‘security’ of a 30-year fixed loan when, in fact, they will likely be selling or refinancing in less than ten years.” Different loan types can translate into lower payments up front.



When looking at a home that is $25,000 over budget, buyers may initially feel intimidated by what seems like a sizable chunk of money. Take a step back and see the big picture. Tijam shares, “When you do that math on a 30-year mortgage, it ends up being only roughly a $70 monthly increase, and often my clients find they can make adjustments to accommodate the difference.”



Budget Saving Tip #4
: How can this home save you $$?

When buying a home, the price is important, but there are other factors you should also consider that may change the bottom line of your actual costs. “Sometimes a higher-priced home can cost the same as a lower-priced one when you do the math on other factors,” Valentini states.



If you save both time and money due to a shortened commute, take that into consideration. Is the new home in a better school district? The money you were spending on expensive private school tuition can now be put back into your pocket and budget. If your new house is energy efficient, the reduction in your utility bills may make up some of the cost difference of an older home.


Budget Saving Tip #5
: Dream big. Buy smart.

While it is never advisable to bend your budget until it breaks, it is just as sad to pass on your dream home, just because it is priced out of your budget. “If a home is truly out of my clients’ budget, I would emphatically advise them to continue looking,” Valentini says. She continues, “Buying a home is not something to take lightly. “You will likely live there for quite some time, so it is important not just to settle,” especially if there are ways to get creative and make it work.

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