If you want to buy a home but aren’t sure if you can afford it, there are things you can do to stretch your buying power.
You can become a savvy home buyer without breaking your budget by following some of the tips outlined below.
Pre-approved mortgage
Fill out a loan application and go through the process of securing financing.
That way, when you’re ready to seriously evaluate real estate, you’ll know exactly how much home you can afford. And you can prove to a seller that your offer is sincere.
Explore fiscal options
During the home loan pre–approval process, ask about ways to get creative with your financing.
Low down payment options, first and second mortgage combinations and first time buyer programs might help you afford more funding.
Down payment grants are also available in some instances and might be worth investigating or discussing with your realtor.
Whatever the case, make sure you thoroughly evaluate the terms for the home loan you decide on.
Sell existing home first
Although selling your existing home before finding new real estate to buy can be nerve wracking, the inconvenience will be offset by your ability to make an offer with cash in hand.
Contingent purchases are not the best when negotiating to buy a home.
Having your financing in order and your bags packed may give you the advantage in a competitive market.
Vacant real estate
Perhaps a seller’s job has transferred him out of the area. Or maybe a family purchased a new home before putting their existing one on the market.
In any case, a vacant home could be just the deal for a savvy home buyer, so have your realtor look for vacant property in your preferred neighbourhoods.
And keep in mind, the longer a house stays empty, the greater your negotiating power will be.
Consider cosmetic fixers
If you’re handy with a paintbrush, a toolset and gardening equipment, consider buying real estate in need of cosmetic fixing.
Property that lacks curb appeal needs minor handiwork or the yard overhauled could end up being the home of your dreams for a price you can afford.
You just need to look beyond the ho–hum to see the potential of a cosmetic fixer.
Buy a remodel project
If you want to live on Okanagan Lake, but can’t afford a $1.5 million home mortgage, consider buying a dilapidated cottage on a fabulous lot with western exposure.
In time you’ll need to gut the existing home and build from the ground up or contract significant home improvements.
But in the end your property value may skyrocket. And if your carpentry and other construction skills are well–developed, you can save even more and accrue “sweat equity” during your remodel by doing much of the work yourself.
bank foreclosures
One person’s loss could be your gain if you buy real estate in foreclosure.
Although the search for a decent foreclosure may take a while, your realtor should be able help. Your best bet will be homes that need cosmetic work or even major repairs.
manufactured homes
Sometimes, to buy a home on a budget, you need to look beyond convention.
Even if your wish is to buy real estate, you may have to settle for a piece of property in an outlying area with a mobile or manufactured home.
Flesh out this option and try to keep an open mind about this possibility.
Older, smaller home
If you can enjoy life in an older and smaller home in a neighborhood or suburb off the beaten path, this could be your ticket to real estate ownership.
The cheapest house in the best neighbourhood. You have your heart set on a specific—and expensive —neighborhood.
Maybe it’s the schools that you’re interested in.
Or perhaps it’s the close proximity to downtown or the waterfront.
In any case, a budget–savvy buyer will look for the least expensive home for sale in the neighborhood.
