Creating a budget for any kind of situation can be difficult. Thinking about how much money you spend on a regular basis and attempting to organize it as strictly as possible is a stressful and tiring experience. It can also be hard to predict how much you actually spend on certain activities if you are not very good at keeping track of your spending habits. All of this stress increases tenfold when you decide to buy a new home, as it is likely to be the most expensive thing most people ever purchase in their lifetime. So, in order to reduce the stress of budgeting for the purchase of a new home, we will share some helpful tips and tricks for budgeting the purchase of your new home.
Home Owning Expenses
When it comes to getting a new home, many people falsely believe the only regular monthly payments they will need to be making is on the mortgage, but this is not true. There are a lot more regular costs that first time home buyers usually do not expect.
Some examples of exterior expenses beyond just the mortgage itself include property tax, repairs and maintenance, homeowner’s insurance, utilities, landscaping, etc.
It is important to take all of these expenses into account during the budgeting process, as they can turn a home that was originally affordable into one that is too overpriced for your budget.
The Down Payment
Most lenders in Ireland typically want homebuyers to be able to pay for at least 30% of the property upfront with their down payment.
Make sure you are saving as much money as possible in the years leading up to the time when you would like to get a mortgage on a new home so that you can afford a down payment of that size.
The 28% Rule
The 28% rule is a common rule in mortgages, and it basically means that when you are budgeting for a new home you should make sure your regular monthly mortgage payments are no more than 28% of your regular gross income each month.
Using this rule will be helpful when making your budget as it will ensure your debt remains below a certain level and will be less likely to overwhelm you in the future.
Choosing the Right Property
Choosing the right property for you is an extremely important part of the home buying process, and should be taken into serious consideration as early as the budgeting stage of the process.
Figuring out what your ideal home looks like should be done early as certain must-haves can seriously affect the price of homes you will want to look at.
It is also important to learn what you can live without to compensate for the potentially expensive features you desire in your new home.