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Four rules to help stick to a homebuying budget

April 27, 2011

After deciding to buy a home, the next step is finding the right one, at the right price. 
A real estate agent, along with a mortgage specialist, can help determine what kind of price
range is realistic.

However, once that number has been determined, Freddie Mac says some people looking to buy a home still have challenges finding the home of their dreams.

Four budgeting rules:

1. The first rule – which is fairly self-explanatory – is to actually stick to the budget that is set and not buy a house that is out of reach financially.  Trying to buy a home out of that pre-determined price range, can cause financial stress, Freddie Says.
2. Freddie Mac’s second rule follows the same lines.  It’s tough to overlook beautiful home, even if it is too pricey.  But, it’s important to make sure the head wins out over the heart, so avoid open houses for ones that are too pricey.
3. If it seems difficult to find a home that has everything and still falls within that budget, Freddie Mac says it may be time to take a step back and be flexible with that initial vision for a dream home.  It may be that some requirements in the initial home search are unrealistic and need to be rethought.
4. After finding a home that looks like a good fit, it’s also important to account for costs that might not be included in the actual price of the home, such as utility fees, commuting costs or maintenance needs that need to be addressed.

Budgeting for interior home renovations down the road (like furniture, fresh coats of paint or new carpeting) may not be deal breakers.  However, buyers should keep these future projects in mind as they set aside funds for more immediate items like their down payment and closing costs.

Don’t rush the next step

After finding what seems like the right home, Freddie Mac says it’s also important not to make a quick spur-of-the-momentdecision to make an offer without checking with others.  Take pictures of the inside and outside of the home, so there’ssomething tangible to look at when thinking about it later.  Before making a decision on a home it may be helpful to bring other family members or friends to look around as well.  They may notice things that spark new questions about the property.