When Buying a House: Sticking to Your Budget

a piggy bank and an electronic calculator with coins on the side

If you’re like most home buyers, you probably have an idea of the features and amenities you want in a house. These may include a sizable master bedroom, a gourmet kitchen, or a spacious backyard. While there is nothing wrong with wanting these things, you should also know that adding more to a list of your must-haves could ruin your budget.

Altius Mortgage Group and other mortgage brokers in Salt Lake City share how you can stick within your budget when buying a house:

Get a Mortgage Pre-approval and Set a Price Limit

With a pre-approval, the lender will determine the amount they think you can borrow to finance a home. Just don’t assume that the said amount is what you should aim to spend. It’s best to go lower that amount or use a mortgage calculator to get an estimate of how much you can afford to pay. You should also know the other expenses that should be included in your budget when buying and owning a home.

Work Closely with Your Agent

When working with a local agent, emphasize your need and desire to stay within your budget, so they can only show homes you can comfortably afford. Do take note that some agents may try to encourage you to consider more expensive homes, so it is important to stick to your guns. You may also want to find a new agent if the one you have always is recommending properties beyond your budget

Don’t Compare (and Despair)

If you, for instance, have a budget of $250,000 and found out that your friend bought a house that is way over your price limit, you may find yourself comparing and despairing about your options. When this happens to you, remind yourself that overspending on a house can become a burden for the long term. Also, think about the benefits of sticking to your budget like having a college or retirement fund.

Be Cautious About Bidding Wars

If the house you like has multiple offers, you will have to compete with others to get it. In many cases, increasing your offer can help you win the bidding war. This won’t be a problem, as long as you can stick to your budget limit. If this isn’t the case, be wary of spending more than what you want and can afford. You can also let go and walkway and consider other houses.

You don’t have to choose the cheaper house available, but you should also think about your finances and long-term goals. It is always important to make sure that you get the house you want without putting too much pressure on your finances and budget.