As recent years in the real estate market have shown, overlooking the financial weight of buying a home can be a costly mistake. To help you navigate the process with confidence—and avoid biting off more than you can chew—here are a few essential tips to stay financially grounded while finding the right home.
1. Get Pre-Approved, Not Just Pre-Qualified
In today’s market, getting pre-approved is a must. It goes beyond a basic financial check by providing a lender-verified estimate of what you can afford based on your actual income, credit history, and debt. This step not only keeps you from wasting time on homes outside your budget—it also makes your offer stronger and more competitive when you’re ready to buy.
2. Choose the Right Mortgage for Your Situation
With growing financial commitments like student loans and credit card debt, many buyers are opting for 30-year mortgages instead of 15-year ones. The longer term means lower monthly payments and more flexibility, with the option to pay extra toward the principal when possible. Also, consider paying mortgage points upfront to lower your interest rate—especially if you plan to stay in the home long term. It could lead to significant savings over time.
3. Research Before You Make an Offer
Before you submit an offer, research recent sales of comparable homes in the neighborhood—especially those sold within the last 90 days. Use platforms like Zillow or Redfin to check trends. If similar homes have sold for 5% below asking price, consider making an initial offer 8–10% below the listed price to leave room for negotiation while staying realistic.