How to Budget for Your First Home

December 12th, 2014 by: relatedchicago

real-estate-cashThere is no question that purchasing your first home can be both exciting and terrifying. After all, this is the single, largest investment you are most likely making to date and if you do not plan properly, you may be left unable to afford the home you choose.

Before you even start to look for Lincoln Park Chicago real estate, you should take a careful look at your finances now, and what they will look like in the foreseeable future. There are a number of budget considerations you need to make to ensure that issues will not arise down the road.

When searching for homes for sale in Lincoln Park Chicago don’t underestimate the costs that are associated with this purchase. In addition to the cost of the home and property, you will also have to pay for a home inspection, as well as a property appraisal. The inspection process will let you know if there are any serious issues and may save you thousands of dollars in unexpected repairs.

When you are budgeting for a home purchase, you will also have to think about the long-term costs associated with it. This includes things such as:

  • Utility costs.
  • Regular maintenance for the interior and the exterior of your home.
  • Title insurance and closing costs, unless they are rolled into your loan.
  • Taxes
  • Mortgage Insurance

Before you dive into a home purchase, it is also a good idea to build up your credit score and reduce your debt. This will help you handle these new expenses easily, without struggling to make ends meet.

Unfortunately there is no magic number that will help you determine how much you can realistically afford. While there are some calculators that can provide you with a general estimate, they can not predict future changes in situations, such as sudden unemployment loss, divorce, or health concerns that can affect income, which means that what you can afford one month, may not be the same the next. This is why saving cash, reducing debt, and sticking with a budget will help secure the future. It is also a good idea to use the help of a Lincoln Park Chicago realtor, since they may be able to help you determine what you can realistically afford for your personal budget.

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