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Finding An Affordable Home

By: Huntsville Real Estate Expert Mike Manosky On July 10, 2015

Owning a home is still the “American Dream.” However, finding an affordable home has gotten somewhat tricky in the last few years. According to Trulia, millennials and first time homebuyers are particularly daunted by affordability.

homebuyerToday’s mortgage requirements and down payment needs are making buying difficult. New buyers need to come to find compromises and sacrifices. Here are some suggestions…

  • Price is the biggest sacrifice you can make. Consider buying a home that is 20% less than your banker tells you that you can afford. That will have a huge impact on your ability to pay every month.
  • Cash in the bank is also a huge positive impact on affordability. Force yourself to save a 20% down payment. This immediately means lower monthly payments, lower interest rate, and avoids private mortgage insurance.
  • Neighborhood and location may need to be sacrificed somewhat. Look for a home just outside your ideal neighborhood. Locate near public transportation or within a short drive. You want to have easy access to work and recreation, but also stay out of the priciest neighborhoods.
  • Home type can make a big difference. If you don’t want to compromise on the location, but the single-family homes are too much of a financial stretch, consider a condo, townhome, or a duplex. These housing types make finding an affordable home easier, but may still give you the address you’re after.
  • Square footage may need some trimming. “15% of Trulia’s ‘American Dream’ survey said they now like to purchase a home with 2,600 plus square feet.” Look for open floor plans and outdoor access. This will make a smaller home feel larger.
  • Move-in condition costs money. Look for homes that need a little fixing up and TLC, and consider improving the home yourself after move-in.
  • Extra bedrooms cost money. Consider buying just what you actually need to live and look for extra space in a den or in basements and attics.
  • Outdoor space can greatly enhance your pleasure with your home, but land comes at a premium. Consider compromising with a deck or patio without paying the price of living on the edge of wooded open space.
  • Buying by yourself may be your ideal, but consider getting some help. Parents can legally “gift” $14,000 each to children per year, which could make a big difference in the cost of a mortgage.

For more detailed suggestions, see Michael Corbett’s article on Trulia.

Information provided by Huntsville Real Estate Broker Mike Manosky.

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