Deciding to purchase a home for sale in Florida is a big deal. Oftentimes, it is a substantial financial decision with lasting consequences. With the median cost of homes in Florida being $289,900, it’s not outrageous to come to the conclusion that you’ll have to break the bank in order to receive a pair of keys to your new home. But you don’t have to!
Fortunately, purchasing a new home can be very economic if you take some time to do dedicated research and weigh out all your options carefully. Matter of fact, as a buyer, it’s a good rule of thumb to go into the house buying process as informed as possible, so that you don’t end up being persuaded into terrible deals because you didn’t brief yourself on the state of the market. Here are some useful tips to keep in mind.
Add up your income
The first tip when it comes to buying a home on a budget is assessing your cumulative funds. For example, let’s use the monthly earnings of a two-earner household. Let’s say the monthly breakdown looks like this:
Jack’s 1st Paycheck: $2,000
Jack’s 2nd Paycheck: $2,000
Jill’s Monthly Paycheck: $4,500
Per month, the household has a total earning of $8,500. This information is useful! Especially when it comes to finding a house within this threshold. You can even use handy tools such as a monthly mortgage calculator to enter in the relevant terms for your home loan and see how much it would run you per month. If it exceeds your earnings, or eers too close to your monthly maximum earnings, renegotiate the terms or find a more affordable home.
Determine your household expenses
Going hand-in-hand with the first tip listed, once you have your monthly earnings squared away, it’s time to divy up your expenses. After all, it wouldn’t make sense to spend $7,000 on your monthly loan, but then have not much left for car payments, groceries, bills, and other fees. Before purchasing a home, you want to choose one that only takes up a reasonable percentage of your monthly expenses. As a typical rule, monthly housing costs, which include mortgage payments, insurance, and property taxes, should not exceed 28%. Here’s an example of what an expense breakdown list would look like for Jack and Jill:
- Housing Costs: $2,380
- Savings: $1,000
- Utilities: $500
- Groceries: $650
- Medical: $400
- Personal: $1,000
- Eating Out: $300
- Transportation: $750
- Savings: $1,500
All of these expenses roughly add up to $8,500, with housing fees only being 28% of the cost. Drawing out a list like this will make it possible to assess the house most able to fit in with the rest of your expenses, so that your life and financials don’t have to change dramatically with a new home.
Clean up your credit
The benefits of having a great credit score seem near endless. One of the primary advantages is low interest rate on loans. What are loans typically used for? Ding ding, houses! If you have a great credit score, you’ll almost always qualify for the best interest rates and you’ll be charged less on monthly mortgage payments too.
This, inevitably, will help you get the dream home you’ve been looking for while saving thousands of dollars over the lifetime of your loan. Usually, you’ll want to check your credit score at least 12 months prior to applying for a mortgage. Make sure to see if you qualify for military home loan benefits as well!