Creating a Budget for Your Dream Home: How to Plan and Save

 Our Guest Author today:  Anthony Baker 

Owning the property of your dreams requires meticulous planning and discipline. It all comes down to how much you can afford to spend on this purchase. Therefore, you must take specific steps when creating a budget for your dream home. Here are some tips on planning and saving enough funds to make your dreams a reality. 

Determine that magic number

The first step towards your dream home is determining how much money you have for this project. This number is essential as it will affect everything that happens later. Investing in homeownership is the most thoughtful thing anyone can do. Nevertheless, you mustn’t forget that you should be able to maintain this home of yours and still have other expenses that won’t go away. 

Start with seeing how much cash you and your partner have and how much money you can loan from a bank. Today, people can go and get pre-approved for a mortgage. That means you go to the bank, and they evaluate your situation even though there is no actual property you are buying. The bank then tells you what the highest mortgage you could get is. That also shortens the later approval period when you find the dream home you want to buy. If you are not eligible for loans or prefer not to get involved with banks, you should see your options before looking for a house. Looking for homes without knowing how much you can spend on them is not a good idea. That way, you can fall in love with one you can’t afford, which will ruin everything that comes after. 

Getting pre-approved for a mortgage is one of the steps toward determining a budget for your dream home.

Plan how to save for the down payment

Even if you are eligible for a loan, you’ll be obliged to make a down payment in cash. That is not necessarily a small amount – it can be up to 20% of the purchase price. Maybe selling something you own but don’t need as much as your home would be a good idea, but that may take time. When several people are interested in the same property, wasting time is not a good idea. That is one of the reasons why you should start saving for a down payment in advance. 

Consider increasing your income

If you don’t like selling something you own to secure funds, you have two options. One is to reduce your expenses, which is not always possible, and may not be enough. Another option is to increase your income. You should try turning to online side hustles to realize your dream of becoming a homeowner. There are many ways to earn money online, and not all require learning new skills in advance. Also, changing your day job is sometimes the only option. But always bear in mind that people have to make choices and take some risks to achieve great results. Think about what you want and whether it is worth what you must do to get it. 

For creating a budget for your dream house, analyze your current and future monthly expenses

Cutting your monthly expenses can be a way to get additional dollars you lack. You’ll manage that by analyzing all your costs. Put every dollar you spend on paper. Write down even those chocolate bars you eat in the morning or the massages you take occasionally. All matters! Then look at it all and see where you can make some cuts. 

Consult the other members of your family

Even if you are the only one that supports the family, you should include others in every step of this project. They will be living there too, and they can make a valuable contribution in terms of ideas and income. Your partner may have been a stay-at-home parent who wishes to contribute financially. Your children should know if you will cut the expenses and understand why and how. A family should do everything together, especially when making big decisions. Never let that slip from your mind. 

You should include your family members in every big decision, including this one.

The closing and relocation costs are there too

Don’t forget about the costs of closing the deal and of relocation. Closing costs are unavoidable, and the best thing you can do is research how much it will be. Another set of costs people tend to forget is the unavoidable relocation costs, but you can do something about their height. It may seem to you that your buddies can do that for you. But they are inexperienced with carrying stuff so they may break something. Also, it will take them longer, and you will need to provide food and drinks for them, as they will be working for free. Finally, unless some of them have a van or a truck, it will take more round trips, gas money, and more time. Looking at it that way, hiring pros can help you save money and move on a budget. Put some effort into doing the math and, again, consider your priorities to know how much your budget needs to be allocated.

Make sure you don’t forget about the costs of relocation.

Be realistic in your wishes

The final advice when developing a budget for your dream home is to be realistic. Do you need to buy a mansion that will have you turn your life upside down and work 15 hours a day only to afford it? Everyone should do all in their power to reach the goal of buying the property of their dreams, but not at some sky-high cost. Your wishes need to be per what you are capable of achieving. Your home should be your refuge and not your source of anxiety.

Final thoughts

Creating a budget for your dream home requires thorough thinking and planning. The more detailed you are, the higher the chances of making the proper purchase that will provide a comfortable life for you. Remember, you are trying to make your life nicer and not more complicated and tense, so do your best, and it will pay off.

Author’s Bio

Anthony Baker is a financial consultant on the logistics team at zaptmovers.com. He also offers free valuable financial tips through his articles related to real estate purchases and other financial endeavors. Helping couples manage to buy their first property is a joy for him, which was one of the reasons why he started writing these blogs. 

Photos used:

https://www.pexels.com/photo/calculator-and-notepad-placed-on-usa-dollars-stack-4386366/

https://www.pexels.com/photo/a-person-holding-a-black-pen-7731402/ 

https://www.pexels.com/photo/a-woman-showing-a-family-a-house-layout-8729964/

https://www.pexels.com/photo/a-woman-showing-a-family-a-house-layout-8729964/

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Ways to Create Your Wish List when Looking for a New Place

 Our guest author today:  Amy Collins 

Getting a new place is always exciting, as every new beginning usually is. But finding the right home can be tricky as you probably won’t be able to do it very often. For that reason, people create wish lists of features they would like their new home to have. A list like this can make it easier to decide which home is better for you when you have several to choose from. Also, when you have a wish list when looking for a new place, you ensure that you don’t forget to check some important details. Here are ways to create such a list and save yourself from making the costly mistake of choosing the wrong place. 

Set your priorities straight

When looking for a new place, many factors will be involved in your decision-making process. But you must determine what your priority is and what is less critical. For example, some people struggled with insufficient storage space in their old homes. For them, it might be crucial that their new place possesses enough storage for all their belongings. Others might consider a backyard the most relevant because their children like to play outside. 

When it comes to one’s needs and priorities, there is no rule as to what is correct. You are the one that knows what is essential for you. That is important because there’s a pretty good chance your budget is not unlimited. That means you cannot afford a place that scores the highest in all features. Make a list of features you define as positive ones and sort them according to how important they are to you. It will be easier for you to determine how high on your list is something a place lacks and whether you can live without it.

Your wish list when looking for a new place should contain a red flag section

Getting familiarized with the red flags, you should pay special attention to is also essential. Speak to a professional if technical sciences are not your area of expertise to tell you about the defects a house may possess that are costly to correct. As with all the decisions in life, it is helpful to get to know the vital information related to the topic. Key terms will be repeated many times, and it would be good if you learned what they mean. Also, when a civil engineer, for example, tells you about the importance of a good foundation, it would be good if you already knew something more about it. Here are some of the biggest red flats you should add to your wish list when looking for a new place:

● Water in the basement. That could be a sign of problems with the gutters, the roof, the foundation, and many other things. Solving this issue could be very expensive, so make sure you inspect it well.

● Cracks on the walls. If you see these, the best action would be to consult a professional. The problem may be merely cosmetic or structural.

● Signs of termite damage. Termites can be tough to exterminate. An expert consult is a must. 

The presence of termites may be costly to fix, so look for the signs of it. 

Create a wish list together as a family

Unless you are the only one living in this new home, you should consider what the others have to say. Remember that the family is about love and respect for everyone’s needs and opinions. Therefore, everyone should say what they would like their new family home to be like. When you approach the home purchase that way, you’ll ensure your entire family is happy with your choice. 

When creating your wish list when looking for a new place, make sure you include the opinions of other family members.

Never let your budget get out of sight

Unfortunately, for most of us, desires and reality differ significantly. That is mainly because of the money we do or do not possess. Fortunately, none of those material things we can afford make a real difference in our happiness, so it isn’t a big issue. But when buying a new place, it is easy to forget about this fact. So, before starting the whole process, determine your budget and stick to it at all costs. You should be able to afford to buy a new home, maintain it, and pay the bills. Take that part into consideration as well. If you are buying internationally, research what your monthly costs would be there. Buying a house overseas can differ from buying one in the States, as there are different daily costs. Having all the data beforehand is a sure way to avoid making mistakes. 

Never let your budget out of your sight.

A list with Pros and Cons on each side of the paper is a proven classic

The wish lists are great when you are looking to buy a new home. But what to do when you find several that have similar features? You can always use the proven classic: A list with Pros and Cons. Sometimes the old methods are the best. Just take a pen and paper and list all the positive sides of a place on the left and the negative sides on the right. If you can’t decide between several properties, that should be the last step in becoming a homeowner. 

Final thoughts

When creating a wish list when looking for a new place, just focus on what you want. Also, consulting a professional is always a good idea because their experience can help you avoid costly mistakes. And don’t forget other people's opinions in that new home. Their satisfaction can only enlarge yours, so don’t take it for granted. Always keep in mind the following: The more effort you put into something, the outcome will be closer to what you desire. 

Author’s Bio

Amy Collins is an architect and an expert on logistics that has been part of the Four Winds KSA team for several years. She writes blogs advising people looking for new homes to help them find the perfect one and relocate to it in the least stressful possible way. 

Photos used: 

https://unsplash.com/photos/r_X4YHAlBPo

https://unsplash.com/photos/ivxb0wfeWzg

https://unsplash.com/photos/pElSkGRA2NU

https://unsplash.com/photos/CHVTt0aGbx0