Buying a Home Without Breaking the Bank

by Candice Stokes

Shopping for your dream home is exciting, but budgeting for a home purchase involves more than just reading the number on a preapproval letter. It may be easy to focus only on large items like mortgage payments and property taxes, but some new homeowners forget less obvious costs, such as utility deposits, appliance replacements, cosmetic repairs, and HOA fees.

To safeguard your budget and maximize your peace of mind, consider these tips:

Reserve 1-4% of your overall budget for hidden costs. The percentage may vary
depending on factors, such as the age and location of the home or how much money
you put toward the down payment but it is wise to keep a margin of error in your
budget for hidden costs.
Don't skip a home inspection. Be sure to get a detailed report from the home inspector for a realistic
understanding of what repairs and improvements are needed. Finding a problem early in the process can save thousands of dollars down the road.
Find the right home warranty. Appliances sometimes require repair or replacement especially in older homes. A home warranty is separate from homeowner's insurance and can protect your wallet from the full cost of home system and appliance repairs in the future.