Buying a house is probably the most expensive purchase you’ll ever make and maybe one you’ve dreamed about for a long time. Planning will serve you much better than dreaming because it’s so easy to overspend when you buy a house. It’s easy to get caught up in all the seductive features, and it’s even easier to forget that the cost of buying a house goes far beyond the purchase price. Other costs and fees can include the down payment, underwriting and application fees, inspections, escrow fees, mortgage insurance, and more. So let’s look at ways to ensure you won’t overspend when buying a house in Omaha and Council Bluffs.
Understand Your Finances and Set Your Budget
Your first step toward buying a house in Omaha and Council Bluffs and to make sure you won’t overspend is to sit down and look carefully at your finances and then hammer out a well-defined budget. You need to know what kind of monthly mortgage payment you can afford, and you also have to factor in recurring expenses like property taxes, homeowners insurance, maintenance costs, and HOA fees.
You need to “have a strong understanding of your cash flow today what income is coming in, what expenses are going out, and what amount you are saving. One rule of thumb is that you shouldn’t spend more than 28%of your gross monthly income on housing-related costs and 36% on total debts, including your mortgage, credit cards, and other loans.”
Remember, though, that everyone’s situation is different. And you also have to factor in other purchase-related costs such as moving, any home improvements or repairs that may be needed, new furniture, appliances to name a few.
Don’t Assume Your Income Will Increase
Most people see an increase in income over time. But that’s not always the case, and in today’s uncertain economic climate it’s certainly not guaranteed. So don’t plan your budget for buying a house in Omaha and Council Bluffs on the assumption that your income will increase.
Here’s how one home buyer expresses it “In the 5 years that we’ve lived in this house, there have been times that we’ve made quite a bit of money and we could have easily afforded a much larger mortgage payment. There have also been times when our income was much lower and we were so thankful that we had such an affordable payment that allowed us to not stress much about money.”
If you want to ensure you don’t overspend, then, don’t proceed on the assumption that you’ll make more in the future that a barely manageable mortgage payment will be easy to handle in a couple of years. For “no rational financial planner would ever tell you to plan on everything always going right.” You want to live within your means today so you can continue to live a stress-free life (at least as to whether or not you are able to make your house payment.
Plan for Maintenance, Repairs, and Upgrades
Similarly, make sure to plan for maintenance, repairs, and upgrades often are unexpected expenses and may not be affordable if not planned for. Buying a house in Omaha and Council Bluffs and not overspending means planning for the unexpected.
All homes need regular maintenance, and “even a house that was in very good condition on closing day will inevitably need some big-ticket fixes over the years.” But many people don’t plan for these expenses, and the upshot is that they wind up in a position where they’ve overspent. Consider that “41% of people who have purchased a home in the past 12 months say their biggest money worries in the coming two years will be affording home repairs and maintenance.” Some of your major expenses could be a new roof, HVAC system or water heater.
Stay Away From Bidding Wars
Another way to avoid overspending when buying a house in Omaha and Council Bluffs is by staying out of bidding wars. You may feel it’s your only option to get that house you love, but try to avoid it if at all possible. Here’s why . . .
“Competing with other home buyers is no picnic, and to win a bidding war, you often have to increase your offer. This isn’t necessarily bad, as long as you’re able to stay within budget however, bidding wars can get out of hand quickly. If you get caught in a bidding frenzy, you could end up spending more than you want or can afford.”
You’ll be much better off sticking to your predetermined upper price limit and always keeping the option to walk away open. If you do see a bidding war looming, be sure to consult your local real estate agent in Omaha and Council Bluffs before getting caught up in it. To find out more give Chris and her team at Homes By Chris Harter a call at 402-378-9462.
Buying a house in Omaha and Council Bluffs can get out of hand if you compare yourself to others.
“It’s very easy to fall into the cycle of ‘compare and despair.”’ If you’re working with a budget of $250,000 and your best friend just bought a house for $300,000, you might find yourself comparing your home options and amenities to his or hers. This is a nasty cycle to fall into, especially when it comes to buying a home. A house isn’t a pair of shoes or an expensive handbag if you overspend when buying a house, it isn’t easy to recover from purchasing a home that you overspent on.”
Instead, think about the features you will have to enjoy in the home you can afford. And always keep in mind the benefits of staying within your budget.
Use an Agent You Can Trust
Most of the time, home sellers in Omaha and Council Bluffs and homebuyers have good experiences with their local realtors in Omaha and Council Bluffs. Typically, your local agent in Omaha and Council Bluffs will be looking out for your best interests and will help you ensure you don’t overspend. But there are unpleasant and costly exceptions.
Some local real estate agents in Council Bluffs and Omaha, for example, may push properties on you that are outside your price range simply to get a bigger commission. But a good local realtor in Council Bluffs and Omaha will respect your financial situation and help you shop within your budget.
Finding an experienced local agent in Council Bluffs and Omaha you can trust is critical. Find a realtor that will advise you to ensure you won’t overspend when buying a house in Omaha and Council Bluffs, contact a local real estate agent in Council Bluffs and Omaha today, you can reach Chris and her team at Home By Chris Harter, 402-378-9462, or www.homesbychrisharter.com!