How Much Money Do You Need to Buy a Home?

by Kate Kennedy 08/18/2019

The amount of money you will need to ensure you can purchase a house varies based on a number of factors. For example, if you want to purchase a house in a big city, you may need to save more money than you likely would require to buy a residence in a small town. Meanwhile, your decision to choose a fixed-rate mortgage over an adjustable-rate mortgage – or vice-versa – can impact your monthly housing costs. And let's not forget about the costs of home utilities like electricity and water, either.

Ultimately, it helps to put together a homebuying budget before you embark on a house search. Because if you know how much money you have at your disposal, you can map out your house search accordingly. And as a result, you can minimize the risk of spending too much to acquire your dream residence.

Let's now take a look at three tips to help you craft an effective homebuying budget.

1. Evaluate Your Current Expenses

An in-depth assessment of your current monthly expenses is key. If you conduct an expense evaluation, you can find out how much you spend on various must-haves and wants. You then can take steps to reduce your monthly expenses and increase your savings for a new home.

It also never hurts to consult with a financial planner. If you have a financial planner at your side, you can gain expert insights to help you evaluate your current expenses. Plus, you can work with a financial planner to determine the best course of action so you can eventually buy your dream residence.

2. Get Pre-Approved for a Mortgage

Meet with a variety of banks and credit unions and explore your mortgage options – you will be happy you did. If you assess your mortgage options closely, you can find one that complements your finances. And once you get pre-approved for a mortgage, you will know how much you can spend on a house.

Generally, it is beneficial to meet with as many banks and credit unions as you can. If you consult with myriad lenders, you can receive extensive insights into many mortgage options. Best of all, you will be better equipped than ever before to find the lowest-possible interest rate on a mortgage.

3. Consider Your Down Payment Options

The down payment required for a home purchase varies, but it commonly ranges between 5 percent and 20 percent of a house's total price. If you account for a down payment as you craft a homebuying budget, you can use this total to plan ahead for the property buying journey.

Lastly, you may want to collaborate with a real estate agent as you prepare to launch a home search. In addition to helping you find your dream residence, a real estate agent can put you in touch with potential lenders and offer plenty of guidance throughout the property buying journey.

Ready to pursue a home? Use the aforementioned tips, and you create a successful homebuying budget.

About the Author
Author

Kate Kennedy

 

Kate Kennedy is welcomed by the Heyler Realty team as a sales professional specializing in the Westside of Los Angeles. Kate has developed the professional acumen specifically designed to advocate on the behalf of her real estate clientele. Living in Santa Monica, Kate appreciates first hand how special it is to live by the sea, and is committed to helping her clients find their own perfect place in the sun.

Having been raised the daughter of a lobsterman, Kate learned early on what “hard work” truly means.  Coupling her inherited strong work ethic with her entrepreneurial spirit, Kate decided to break out on her own and leave the snowy Maine coast bound for the sunny shores of California. 

To say there was a bit of culture shock was an understatement, but Kate is the type of a person that likes to make big bold moves, and embracing this challenge was no different.  It didn’t take long before Kate had settled herself in Santa Monica, finding the small town feel familiar and comforting- even if the ocean was on the “wrong” side.

 Once she established her new home, Kate quickly went to work building her business, “Kate K My Way.” For well over a decade, Kate has been running her exclusive personal assistant business which was built entirely from client referrals. Kate’s desire to help people and make a difference on a personal level is what made her stand out among the masses.  Her no-nonsense East Coast practicality is what helped her to get the job done, and done correctly. Kate employs these same principles to her work as a Realtor.

Living in Santa Monica and proudly serving her community as a Board Member of the Ocean Park Association, Kate appreciates first hand how special it is to live by the sea, and  is committed to helping her clients find their own perfect place in the sun. Her commitment to her clients is unwavering.   Kate’s communication skills, attention to detail and ability to focus on the big picture help to ensure easy transactions and positive results for her clients.  Above all Kate prides herself on her honesty, integrity and ability to bring good humor to all of her business dealings.

Outside the Office

Kate and her husband, Steve, live in the Ocean Park neighborhood of Santa Monica, and enjoy taking full advantage of all that west coast seaside living has to offer. As cheesy as it may sound, Kate really DOES love long walks on the beach, but you will have to get up very early in the morning to catch her down by Tower 26. Kate’s other interests include cooking for friends, attending local theatre, gardening, and reading science fiction and Stephen King novels.

Professional Accomplishments

Five Star Professional Rising Star Award 2019