Tips For House Hunting On A Limited Budget

Posted on: 17 July 2017

House hunting on a small budget isn't easy, but it's possible. Apart from patience, here are other tips to help you land a good property at a reasonable cost:

Define Your Budget

It's not just enough to know that you have a shoestring budget; you need to know exactly how small your budget is. Do your calculations so that you know exactly how much you can afford to spend on the house. Apart from the down payment and mortgage, don't forget that you need to account for related costs such as closing costs, taxes, and maintenance.

List Your Must-Have Features

You will have to compromise on a lot of features if you have a small budget. At the same time, you also have features that your new home must have. Make a list of these must-have features (such as the square footage or the number of bedrooms) so that you can focus on houses that have them and not waste time on properties that you won't purchase even if they fall within your budget.

Look for Financing Programs with Low Rates

If you are on a tight budget, then it will be difficult for you to operate with the mainstream banks due to their characteristically high rates. Source your mortgage from lenders known for low rates, such as United States Department of Agriculture (USDA), Federal Housing Administration (FHA), and Veterans Affairs (VA). These lenders have specific prerequisites that you (in some cases even the property) must meet to qualify for the loans. Do your research to know which ones you qualify for.

Don't Forget About the Resale Value

Lastly, try and have the resale value as one of the factors used in evaluating your potential purchases. This is because if you are buying a house on a small budget, there are high chances that you won't get your dream home. As such, there is a high probability that you may need to sell the property in the future and purchase your dream house when your financial situation improves. Buying a property with a good resale value will help you sell the house fast and at a reasonable price when that time comes.

Buying a house without an agent is possible, but it isn't advisable, even for those who have considerable budgets. It's even worse if you are operating on a small budget. Therefore, contact a property agent to help you with the search; the agent will save you more than the money they will get via the commission.