Tips for Making It Easier To Buy a Home

Buying a home can be a complex issue in itself and that’s on top of just being able to afford it. Here are some tips to bring it closer to reality.

Think on a small scale.
A small home or even a loft or condo in an area where demand is high will help build equity quickly as this type of place usually increases in value.

Get a fixer-upper.
This can be a great way to get a home for less. But be sure it’s repairs you can handle as well as knowing the building codes and knowing how to navigate the inspection processes. You don’t want to find that you have to take all the money you saved and turn around and spend it on contractors because the tasks were above the level of a weekend warrior.

Skip the realtor.
Be a little nosey (within reason) and get a sense of when homes are about to be on the market. You may be able to buy direct from the owner without any competition.

Start at the bank.
Being pre-approved will help you get to making an offer quicker and be taken more seriously as a buyer.

Utilize loans for low down payments.
You can consider getting an FHA loan but the fees tend to be higher than others.

Leverage tax breaks.
Estimate your taxes including the advantages of the itemized tax deductions from home mortgage interest and property taxes. You can also tap into your traditional IRA and withdraw up to $10k without penalty when buying your first home—the withdrawal is still taxable income however.

Offer what you can afford.
It’s tempting to fall in love with a place and begin to make offers with the thought that you’ll find the money to make it work—although, you’re not in a position to truly handle financially. It can also get competitive with other buyers and the desire to win overtakes your ability to afford your bid. Also, if you’re going down a lengthy sales process and the seller and/or realtor starts presenting you with these “last minute” costs, you may be more willing to pay them because they’re almost negligible compared to the amount of your offer. Also, you may begin to feel you’ve invested so much in buying the house that you start to up your offer as competition grows because you don’t want to feel as you wasted all the time and energy. Whatever the case, you’ll have to live with that mortgage for many years to come so it’s best to stay logical and back out when the price crosses what you can afford.

Save money.
Yes, it’s a little old fashioned but it’s a sound strategy. Try saving ten percent for a down payment. The more you can put down the better.