Buying on a Budget: Tips for Home Buyers With Limited Resources

Homes often don't come cheap, so buying a home on a tight budget can be tricky. Under the circumstances however, it's possible to purchase a home you love. But it takes time and careful strategizing.

If you're a homebuyer on a budget, these smart choices may help you buy a home that perfect home while also meeting your needs as a new home buyer. 

Home Buyers Should be Patient 

Good deals don't happen every day. Many people buying real estate on a budget should be patient and will probably preview many homes over a long period of time before they find the house that meets their needs and one that fits their budget. And because of this longer time-frame, home buyers should have patience during the house search.

It may take many months of searching before finding a property that has all the right qualities and is appropriately affordable. It may help to begin the process with the mindset that you won't find the right home for several months. That way, you'll be prepared for the long wait.

Home Buyers Should Work With a Real Estate Agent

Home buyers who are working within a limited home budget (and especially in a home seller's market) should have a real estate agent on their side. It's hard to navigate the complex waters of the real estate market, and it's especially difficult when working on a tight budget without the assistance of a professional. Working with a qualified real estate agent will ensure that an expert is on your side, negotiating for you and your interests. 

Explore All the Options for Lower Priced Homes

Some homes are sold at lower prices than other similar homes due to extenuating circumstances. These circumstances may have made them less than ideal properties. A homebuyer might consider these non-traditional choices for a home purchase;

• Short Sales: A short sale is an alternative to foreclosure. This type of sale that occurs when the homeowner attempts to sell the home for less than the value of the mortgage and other liens on the property. In other words, the home's market selling price is "short" of the mortgages and liens that have been placed against it. Short sales usually depend on lien holders and creditors, who must agree to take less money than what is owed once the home is sold. 
• Fixer-uppers: Fixer-uppers a good option for do-it-yourself types who aren't afraid to get their hands dirty fixing up their new property. Cosmetic fixer-uppers are usually preferable, because they're generally move-in ready. Cosmetic fixer-uppers are those homes that usually only need new carpet, paint and some updating - not homes that may need major repairs and or have structural issues.
• Foreclosure: Homes in foreclosure may be sold for much less than their value, but buying from a bank can be a slower process than purchasing from a traditional seller. Buying a foreclosure can get tricky too, as foreclosed homes may be in poor condition.

Home Buyers Should Shop for Mortgage Loans

One way to get more for your money is by getting a better deal on a mortgage loan. Low interest rates can lead to low monthly payments, enabling a homebuyer to possibly have a higher budget for a new home purchase. When it comes time to shop for mortgage loans, these tips will help:

• Explore mortgage loans from different lenders. Banks, credit unions and mortgage brokers all may offer different options for home buyers. Your real estate agent may also be able to refer you to a reputable and trustworthy lender, so be sure to ask.
• Check your credit before you apply. Your credit history may influence the type of loan you'll be eligible for and the interest rates that you may receive. Check your credit report to make sure that your credit history is accurate and favorable.

Be a Realistic Home Buyer

Before beginning your search for a home, know what your home budget will be by visiting with a bank, credit union or mortgage broker. Then make a list of all the qualities in a home that you must have - and then make a list of those items that you may want, but can live without. Then contact a qualified real estate agent to assist you in locating a home. Being a realistic home buyer may help avoid disappointments in your search for a new home. 

Even on a tight home budget, given enough time, patience and an experienced real estate agents help, a homebuyer can still be a happy and successful new homeowner.