7-Step Guide to Home Maintenance Will Help You Save Money

If you’re ready to dive into the world of home ownership or move into a new home, don’t get so caught up in the excitement that you make a big mistake.

Ready to stop worrying about money?
Your house can’t talk but it can send you messages. If it’s crying for help, ignoring the messge could cost you money later.
Maintenance is usually cheaper than repairs, so keeping up with checkups around your home can help you avoid a repair bill later. It’s smart to figure out how much to budget for home maintenance. Here are the things you should consider:

7-Step Home Maintenance Plan for 2022

When deciding to DIY or hire a pro, ask yourself how much experience you really have. Things often look easier to do on TV or in a YouTube video than they really are.
You can save on other utility bills, too, with attention to your consumption habits. For instance, some simple reductions in water use could mean saving money on water bills.

1. Don’t Ignore Your House’s Cries For Help

Sometimes it’s necessary to call in the pros when tackling home maintenance or home improvement projects.
All homeowners policies are not created equal, and they can also vary widely based on where you live and in what kind of dwelling. It’s important to understand when it can help you out — and when it can’t. Here’s an article that will help you learn what home insurance covers.

  1. Anything involving water. A small wet spot can be the sign of a leak somewhere. Eventually that leak will grow and possibly destroy floors, walls, furniture, and more. A leaky faucet, running toilet, or dripping water heater can cost more in water bills than the repair would.
  2. Anything involving electricity. Flickering lights, bad outlets or switches, tripping breakers, and GFI outlets that won’t reset can be signs of electrical problems, which could lead to fires.
  3. Pests. Rodents and bugs can do lots of damage if left alone.
  4. Peeling caulk and paint. Once the protective caulk or paint is gone, water gets in and causes damage.
  5. Broken or malfunctioning HVAC. Problems with your heating, ventilation and air conditioning (HVAC) could means you’re too sweaty or too chilly. But temperature swings inside the home can lead to problems. Additional humidity could cause mold and cold temperatures could cause pipes to freeze.
  6. Cracks. Small cracks are normal. Big or changing cracks aren’t.
  7. Smoke alarm and carbon monoxide detectors. Working detectors save lives. Change the batteries regularly.
  8. Darkening ceilings near fireplaces. Dark places or a sooty smell can mean the fireplace isn’t drafting properly, which can let deadly gasses inside.

2. Keep Up With Home Maintenance

You can save some pennies with some home maintenance and repair tips we Penny Hoarders learned in 2021. We’ve gathered them into this seven-step guide to home maintenance and repairs.

  • Prevent moisture problems. Water can be evil when it shows up in places it shouldn’t. Routinely check your gutters, sump pump, water heater, faucets, drains, septic tanks, and irrigation systems.
  • Maintain appliances and equipment. Do annual HVAC maintenance and change filters regularly. Check the connections in the laundry room and clean the dryer vent. Change filters and clean the range hood in the kitchen.
  • Keep up the exterior. Keep dirt away from the house so water can drain correctly. Inspect the paint and siding to make sure they’re looking good and doing their job of protecting your house. Maintain caulk around openings. Inspect chimneys. Service the electric garage door.

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3. Know When To DIY and When To Use a Pro

Financial experts recommend putting away about 0 a month for home maintenance. That way, you’ll have ,400 a year, which can hopefully cover the maintenance and possible repairs.
Are you among the people planning home maintenance and repair projects? If so, chances are you don’t have a huge stash of cash sitting in your home maintenance budget.
Judging by the amount we’re spending on home maintenance and remodeling, we must be noticing a lot of flaws.
A professional handyperson can handle a wide variety of jobs like caulking, painting, gutter cleaning, patching drywall, installing tile, hanging objects, and installing fixtures. Making a list of what you want done can be helpful so you can prioritize if you only have a handyperson hired for a few hours. .

4. Get Bids for Home Projects

Do you really want to DIY and regret it?
Some simple things can help you get a lower electric bill each month.
Disasters or repairs can ruin your budget. Homeowners insurance can help protect your property and belongings from damage and losses. It also provides liability coverage.

  • Learn about the project by watching videos. This will help you know if someone’s time estimate seems way off.
  • Ask for recommendations. Neighbors, friends, and family often know good people who do good work. Also, real estate agents will be able to tell you who they recommend to get homes ready for sale.
  • Websites and apps make it easy to research who can do what you need. Some even allow you to post a request for someone to bid on your project.
  • Read reviews before you hire someone.

Don’t ignore home repairs, and you’ll save in the long run. Here are eight you can’t afford to put off.

A man hangs his clothes out to dry on a clothesline in his backyard.
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5. Do What You Can to Lower Electric Bills

If you need professional help for your home, getting bids on home projects can save you lots of money and time.

  • Seal cracks and leaks.
  • Upgrade to more energy-efficient equipment.
  • Use fans.
  • Air-dry laundry as much as possible.
  • Change to LED lighting.

Experts say to avoid DIYing anything involving electricity (especially 220 circuits) or water unless you have experience. Things can go bad very quickly.

6. Know What Your Home Insurance Covers

Tiffani Sherman is a Florida-based freelance reporter with more than 25 years of experience writing about finance, health, travel and other topics.
When looking for the right expert for your home project:
Inspectors look at more than 1,000 things throughout a house. In general, those things are:

7. Home Buyers: Don’t Skip Home Inspections

Following this eight-point home inspection checklist could end up throwing cold water on your plans, but it will also prevent buyer’s remorse if you’ve fallen in love with a money pit.
For many people, having to spend lots of time at home can highlight the flaws in their living situations. Either we need to do a bit of remodeling to bring things up to date or we need some maintenance to keep things running smoothly.
Don’t be afraid to ask questions and discuss exactly what the estimate includes and what the payment terms are. It’s your home.

  • Structural components
  • Roof
  • Attic and insulation
  • HVAC systems
  • Plumbing and water
  • Electrical and wiring
  • Outside the house
  • Appliances

In today’s crazy real estate market, forgoing the inspection could make your offer more attractive to the seller, but the average inspection cost of 0 could save you thousands of dollars down the line.
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But it isn’t always easy to know what is covered and what isn’t. And when is it worthwhile to file a claim?

Homeowners — Stop Wasting $3,600/Year. Mortgage.net Helps People Save Thousands

Buying a house is expensive. Like, so expensive. Between down payments, taxes, insurance and more, getting your name on a deed likely costs more than anything else in your life.

And while it no doubt will continue to be your biggest monthly payment, people are still overpaying just to have their own roof over their heads — sometimes by as much as $3,600 a year.

But a website called Mortgage.net can help you put that cash back into your pocket. Whether you’re refinancing or buying a new home, it can save you an average of $300 a month.

See How Much You Could be Saving on Your Mortgage

Homebuyers and homeowners can get some of the lowest interest rates available — as low as 1.997% for a 15 year fixed refinance — from some of the most trusted lenders in the country on mortgage.net.

That comes out to an average savings of $200 to $300 a month — sometimes more. That’s thousands of dollars to use toward upgrading your home, padding your emergency fund or even taking a well deserved vacation after only seeing the inside of your home for the last few years.

Mortgage.net works directly with lenders across the country. That means they know exactly what the lenders need — and what they don’t. In other words, home buyers and owners can simply get a quote for a mortgage or refinance (cash outs, too) in just minutes.

Just fill out a quick one-minute form, including your email and phone number, and Mortgage.net will match you with multiple lending options side-by-side. You’ll be able to see the rates, APRs and monthly payments for different types of loans.

Plus, you can see if the lender will be charging any fees. Some lenders use fancy terms like “origination” or “processing” to disguise fees that aren’t necessary. Mortgage.net shows how much — if any — a lender would charge, sometimes saving you more than $1,000.

Rates are some of the lowest they have ever been, so if you’re buying a home or looking to refinance yours, Mortgage.net makes it easy to compare your options.

It takes just one minute to answer some questions and see how much money you could be saving on your mortgage.

Kari Faber is a staff writer at The Penny Hoarder. 



Source: thepennyhoarder.com

Dear Penny: Should I Be Mad That My Husband Left Me Off the Mortgage?

Dear Penny,
I hope this dilemma has prompted you to set some ground rules about how the two of you make decisions about money. Financing a purchase in one spouse’s name makes sense in some circumstances. But both spouses need to be comfortable with that arrangement.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].
But you didn’t ask how angry you should be at your husband. Your question is: How mad should I be about the repercussions?

Of course, this is a decision that spouses should make together. I trust that you’ve asked your husband why he didn’t talk this through with you and that you’re satisfied with the answer.
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Aside from being mad that he made the decision unilaterally, how mad should I be about the repercussions of this decision? Rather, what are the pros and cons about not being named on our home loan?

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Sometimes a married couple can save money by only financing a home purchase in one spouse’s name. This typically occurs when one spouse has a low credit score or has substantial debt that’s in their name only. Obtaining a mortgage in the more creditworthy spouse’s name only could result in a lower interest rate, provided that they qualify based on their income alone.
Source: thepennyhoarder.com
I don’t see any dire consequences for you as the result of his decision. Theoretically, this could even work in your favor. Because you’re on the deed of the house, you own 50%. But because you’re not on the mortgage, you’re not liable for this debt.
Realistically, though, I’m not sure how much that matters. Since the two of you bought the house while married, it would probably be divided up in court with other assets and debts you acquired during the marriage should the two of you divorce.
The second is that even if you’re both contributing toward mortgage payments, he’s the only one who’s on record as making those payments in the eyes of the credit bureaus. If you’re trying to improve your credit, you’ll have to do so with an account that has your name on it.
Otherwise, I can think of two possible drawbacks for you. The first is that you’ll probably need to go through your husband to communicate with the lender since only his name is on the account. He should give you his log-in credentials so you can confirm that payments are being made on time.
Regardless, it’s essential that you maintain a credit history in your own name. If you don’t already have one, you should open a credit card in your name and pay off the balance in full each month.
If not having your name on the mortgage bothers you, you could always look into refinancing it in both of your names after at least six months have passed. But that will be up to the bank’s discretion. Since your name is on the deed, I’m assuming your husband went the solo route for the interest savings. I doubt you’d want to refinance if it results in paying more — and keep in mind that by the time you’re able to refinance, interest rates could very well be higher.

Ready to stop worrying about money?



My husband and I recently bought a house. In the flurry of paperwork, I didn’t realize that he had applied for the loan in his name only until it was all settled. I’m on the title with him, but not the loan.

Dear Penny: Can I Refuse to Inherit My Mom’s Dump of a Property?

Dear Penny,
My siblings and I are being bequeathed our family home in my mom’s will when she passes. My siblings currently live in apartments on the property. They are several years in arrears for rent they owe and do not maintain the property. 
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Not wanting to own a poorly maintained property with potentially hairy family issues is as good a reason as any. In fact, you don’t need to provide any reason for disclaiming.
Dear D.,

You can’t get your name out of your mother’s will, but you’ll be able to disclaim your inheritance when your mother dies. By doing so, you’re simply refusing to accept your stake in the property that she bequeathed to you.
Ready to stop worrying about money?
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected] or chat with her in The Penny Hoarder Community.
When your mom dies, you’ll have to disclaim the property in writing within nine months. You’ll need to provide a copy of the disclaimer to the executor of your mother’s estate and the IRS, as well as file a copy at the courthouse in the county where your mother is living at the time of her death.

Disclaiming an inheritance isn’t that unusual. People choose to do so for a host of reasons: They’re buried in debt and they don’t want creditors to seize the asset, or they’re worried that the asset could make it harder for them to qualify for college financial aid, Medicaid or other benefits. Wealthy people sometimes disclaim an inheritance to reduce the size of their taxable estate.
I have clearly stated for several years that I do not want to be a part of the shared property due to what I’ve witnessed over the years and the resulting personal and financial exposure that comes with it. Unfortunately, my mom didn’t remove my name. She now has a cognitive impairment that prevents her from doing so.
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There’s really nothing for you to do right now since your mother is still living and unable to revise her will. You’ve been clear about the fact that you don’t want this property, but if you do decide to disclaim it, you may want to communicate that plan to your siblings. That way, at least they’ll know upfront that they’ll be on their own for taxes and long-deferred maintenance. They can also plan accordingly in case inheriting a larger share than they expected jeopardizes any assistance they receive.
Is there a way of removing my name from the asset and/or limiting the potential financial and personal liability that comes with it?

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Because the rules can get complex, I’d suggest consulting with an estate planning attorney when your mother dies. You want to make sure everything is handled appropriately so that you can be confident you’re in no way liable for the property.

3 Questions to Ask Real Estate Agent Before Signing Contract

Real estate is a rapidly evolving industry, and unless you’re an old hand at buying and selling a house, you might need guidance about how to find the right real estate agent.

Where do you start looking for an agent, and how do you go about interviewing them?

We’ve compiled the top three questions to ask a real estate agent that will help you find the best one for the job. These are essential questions to ask any agent before you hire them, plus a few tips on where to find the most qualified agents in your zip code.

1.What’s Your Relevant Experience?

While you may have heard that it’s important to find an agent with X many years of experience or X many sold houses in the last year, there’s a better way to find out if an agent is the right fit for you. Ask about their experience.

“Do you have experience working with my type of buyer?” That’s the No. 1 question people should ask prospective agents, according to James McGrath, co-founder of the NYC real estate brokerage Yoreevo.

“Every agent is presumably doing deals, but if they usually work with retired couples, they might not be a great fit for a first-time home buyer,” said McGrath.

“Probe deeper and ask about the last two buyers (like you) that they worked with,” he added.

This is important because high sales and years on the job can be largely irrelevant if the agent hasn’t worked with a client like you before.

“Years of experience does not translate into deals of experience,” McGrath said. Buyer or seller, be sure to ask prospective agents about their last clients. It’s sure to quickly give you an idea about their ability to meet your expectations.

Chris Zuppa/ The Penny Hoarder

2. How Do You Plan to Market My Home?

If you’re a seller in today’s market, plan on asking your agent how your listing will be promoted. This isn’t simply a matter of advertising in all the right channels, but also making sure your home looks really good online.

According to a study from the National Association of Realtors, 97% of buyers search online for homes — which makes having a strong digital presence a must.

“A house being marketed today needs to be similar to a magazine layout,” said home stager Karen Gray-Plaisted of Design Solutions KPG. “The key is to find an agent who believes in ensuring the house is presented well in all the marketing they do.”

This might mean finding an agent who works with stagers and photographers, and quite possibly even a few marketing gurus. Since most agents offer marketing services on one level or another, focus on finding out exactly how their team operates, and use that info to gauge their ability to make your home irresistible to buyers.

3. How Has the Pandemic Changed the Way You Do Business?

This one isn’t so much about the coronavirus as it is about finding out what’s permanently changed in your area with regards to buying and selling, and if you and the agent are on the same page as far as health precautions. Depending on your pandemic experience, you may not want a bunch of strangers stomping all over your house to check it out. On the contrary, you might hate online meetings — something a lot of agents are still doing.

“While the number of precautions has gone down here in Wisconsin, you’ll still see a lot more virtual services, like listing appointments, closings, etc. happening online,” said Realtor Al Wisnefske of the Land & Legacy Group.

Another change that seems to be sticking around? Appointment-only open houses. This is a good one to know about, since you may not be able to just “pop in” and see a house whenever you want.

“We are in NYC where COVID is under control, at least for the moment,” said McGrath. “Everyone is still wearing masks (more out of courtesy than an actual requirement), but one big change that happened during COVID is that 90% of open houses are still by appointment only.”

Depending on the current restrictions in your area, it’s a good thing to ask any agent you interview what their process looks like, and be sure you’re comfortable with that protocol.

A real estate agent smiles.
Getty Images

How to Find the Right Agent

Now that you know the key questions to ask, here are a few ideas for finding the ideal agent.

Get a Referral

Referrals are hands-down the best (and easiest) way to find a real estate agent who will make you happy. Why? Because if they made your friends happy (and your situation is anything like theirs) then chances are they can help you too.

“Word of mouth is a great place to start,” said Christopher Totaro of Warburg Realty. “Having a referral from a person who has worked with an agent gives you the ability to get real insight as to how that agent performed.”

It will also help you find out how they handle marketing strategies, and if recent enough — how they’re helping clients navigate deals during the pandemic.

Check Online Reviews

This might sound too easy, and that’s because it is. Just like your favorite restaurants, Yelp and Google Maps are both really great places to find out if people like working with certain agents or not.

“The best way to find an agent is to ask friends for a referral,” said John Gluch, founder of the Gluch Group. “The second-best way is searching Yelp. Yelp does a great job of ensuring reviews are legitimate and that the recommended agents on Yelp have truly earned it.”

Before hiring an agent, do a quick online search to see what others have to say about them.

Other Considerations

A lot goes into buying or selling a home, and the process will get easier the more prepared you are. If you’re planning to buy a home in the near future, then you might want to consider things like your credit score, and if you’ll qualify for the mortgage you need. If you’re selling, be sure to ask your agent how saturated the market is, and how to make your listing a competitive one.

As always, take the time to consider all of your options before diving into anything— and don’t be afraid to stay put if the timing doesn’t feel right.

Contributor Larissa Runkle specializes in finance, real estate and lifestyle topics. She is a regular contributor to The Penny Hoarder.  



Source: thepennyhoarder.com

What Is Escrow? How It Keeps Home Buyers and Sellers Safe

What is escrow? In real estate, an escrow account is a secure holding area where important items (e.g., the earnest money check and contracts) are kept safe by an escrow company until the deal is closed and the house officially changes hands. Escrow is also a contractual arrangement in which a third party—usually the escrow officer—maintains money and documents until the deal is done and escrow is closed.

How escrow works

The escrow agent is a third party—perhaps someone from the real estate closing company, an attorney, or a title company agent (customs vary by state), says Andy Prasky, a real estate professional with Re/Max Advantage Plus in Twin Cities.

The third party is there to make sure everything during the transaction proceeds smoothly, including the transfers of money and documents, and to hold assets safely in an escrow account until disbursement.

Escrow protects all of the relevant parties in a real estate transaction, including the seller, the home buyer, and the lender, by ensuring that no escrow funds from your lender and other property change hands until all of the conditions in the agreement have been met. Along the way, proper documentation is filed with the escrow agent or the escrow company as each step toward closing is completed.

Contingencies that might be part of the process could include home inspection, repairs, mortgage approval, and other tasks that need to be accomplished by the buyer or seller. And every time one of those steps is completed, the buyer or seller signs off with a contingency release form; then the transaction moves to the next step (and one step closer to closing).

Once all conditions are met and the transaction is finalized, the closing costs are paid and the money due to the sellers is disbursed from your lender. Meanwhile an escrow officer clears (or records) the title, which means the buyer officially owns the home.

How much does escrow cost?

That varies—as well as whether the buyer or the seller (or both) pays—with the fee for this real estate service typically totaling about 1% to 2% of the cost of the home.

The earnest money deposit

Earnest money—also known as an escrow deposit—is a dollar amount buyers put into an escrow account after a seller accepts their offer. The escrow company holds the money in an escrow account for the duration of the transaction.

Another way to think of it is as a “good-faith” deposit into an escrow account, which will compensate the seller if the buyer breaches the contract and fails to close.

Can you borrow earnest money from your lender?

Most home buyers come up with cash for escrow and deposit it into the escrow account from their own funds. The payment amount is small compared with the cost of the home and the loan, and the home buyers may not even have a mortgage lender yet when they make an offer on a home.

However, earnest money can be borrowed from your lender, but there are certain rules involved. First-time buyers are most likely to need to go to their mortgage lender to make this escrow account deposit. Your lender will ultimately count the deposit toward closing costs and the down payment on the house.

How escrow protects you during the real estate buying process

Escrow may seem like a pain, but here’s how it can work in your favor. Let’s say, for example, the buyer had a home inspection contingency and discovered that the roof needed repairs. The seller agrees to fix the roof. However, during the buyer’s final walk-through, she finds that the roof hasn’t been repaired as expected. In this case, the seller won’t see a dime of the buyer’s money until the roof is fixed. Talk about a nice safeguard!

Sellers benefit from escrow, too: Let’s say the buyers get cold feet at the last minute and bail on the transaction. This may be disappointing to the seller, but at the very least, buyers have typically ponied up a sizable chunk of change for their earnest money deposit. This money, often totaling 1% to 2% of the purchase price of a home, has been held in escrow. When buyers back out with no legitimate reason, they forfeit that money to the seller—a decent consolation for the sale’s failure and the expense of making mortgage payments and other expenses while the home was off the market.

Escrow, in other words, is the equivalent of bumpers on cars, keeping everyone safe as they move forward in a real estate transaction. Odds are, no one’s trying to swindle anyone. But isn’t it nice to know that if something does go wrong, escrow is there to cushion the blow?

What is an escrow account on a mortgage account?

When a homeowner makes monthly payments to the mortgage servicer, part of each payment goes toward the mortgage and part of it goes into an escrow account for payment of property taxes and insurance premiums such as homeowners insurance or mortgage insurance. When those bills are due, the escrow service uses the funds in the escrow account to make payment to your insurance company and to the county for property taxes.

If more money accumulates in your escrow account from monthly payments than is necessary to pay property taxes and insurance, the mortgage company sends you a refund check, and may lower your monthly mortgage payment. On the other hand, if insurance premiums and property tax expenses go up, your mortgage holder may send you a bill for the difference, or raise your monthly loan payments.

Source: realtor.com

Is Your Dream Home Out of Your Price Range? There’s Hope Yet

From the moment you walked in, the house was calling to you. That chef’s kitchen! The ballroom-size playroom! Wait a second, is that a fireplace in the master? Done and done. This is your perfect home…

That is, until you recheck the price and discover it’s just a bit out of your price range. Cruel, cruel world!

There are precious few things in life more exciting than finding your true dream home—and not many things more soul-crushing than realizing you can’t afford it. Or, can you? If you’re determined to stretch your budget the way certain presidential candidates stretch the concept of “sarcasm,” there are ways to pull off this monetary magic without becoming completely house poor.

We’ll show you how to make your budget mesh with your fantasy. For real.

Budget saver No. 1: Negotiate the price

“Everything is always negotiable,” says Chantay Bridges with TruLine Realty in Los Angeles. “You’d be surprised at what sellers, agents, and buyers alike will compromise on.”

You might not get what you want, but you never know—the seller may be extremely motivated because of a move, work relocation, or divorce, for example.

“They may just be looking for a fair offer and would be willing to sell to you for a little less if they can close faster as a result.”

You’d be amazed by how many people make no effort to parley on price. Smart haggling can get you far! Do it.

Budget saver No. 2: Work the programs

There are a wide variety of programs, particularly down payment assistance programs, that help people achieve their dream of homeownership. And contrary to popular belief, you don’t necessarily have to be low-income to quality.

“You may discover a first-time home buyers program that can make your home of choice more affordable by providing assistance with the closing costs or the down payment,” says Bridges. Check with your lender on programs available in your county, since they change frequently. (You can also review some of the state-by-state options.)

What’s that you say? The home is a dream in terms of neighborhood and square footage, but a nightmare on the inside?

If you’re considering a fixer-upper, you can look into financing it with a renovation loan, suggests Sarah Valentini, president and co-founder of Radius Financial Group. “This will enable a home buyer to make desired improvements and have them financed into the mortgage.”

Budget saver No. 3: Massage that mortgage

“The biggest mistake I see a majority of people make is blindly asking for a 30-year fixed mortgage,” Valentini says. Many home buyers, especially millennials, would be better off if they considered other options such as a five-, seven-, or 10-year adjustable-rate mortgage, she says.

“We live in a much more transient society than we did 20 years ago, and people all too often pay for the ‘security’ of a 30-year fixed loan when, in fact, they will likely be selling or refinancing in less than 10 years,” she adds. Looking into a different loan type can translate into lower payments upfront.

Home buyers can also look into creative options for their private mortgage insurance (e.g., having it paid by the lender or seller), which can help you achieve a lower monthly payment.

Budget saver No. 4: Check for ways this home itself could save you money

Sometimes that more expensive house payment will allow you to save in other areas. For example, maybe it makes your commute shorter and less expensive, or it’s in a better school district so you no longer have to foot expensive private school tuition, says Realtor® Jose Tijam with Grand Avenue Realty & Lending in Anaheim, CA.

Another possibility: The energy efficiency of a newer home can reduce your utility bills and might make up some of the cost difference of an older home.

“Sometimes a higher-priced home can actually cost the same as a lower-priced one when you do the math on other factors,” Valentini says.

Budget saver No. 5: Put the decision into perspective

On the one hand, you don’t want to be dumb. “If a home is truly out of my clients’ budget, I would emphatically advise them to continue looking,” Valentini says. However, she adds that while it is never advisable to buy more than you can afford, it is important to consider all factors before passing on a dream home.

“Buying a home is not something to take lightly,” she says. “You will likely live there for quite some time, so it is important not to just settle,” especially if there are ways to get creative and make it work.

Please, Mr. Postman

Send me news, tips, and promos from realtor.com® and Move.

Tijam notes that if your dream house is, say, $25,000 over your ideal budget, it may seem like a huge chunk of money. However, the sting is lessened when you imagine that amount spread over the life of the mortgage.

“When you do that math on a 30-year mortgage, it ends up being only roughly a $70 monthly increase, and often my clients find they can make adjustments to accommodate the difference.”

While he respects the initial budget that his clients have set, he says, he can relate to his clients who have fallen in love with their dream home but find it unaffordable.

“My family and I found a home we adored, but it was slightly over our budget,” he recalls. “We hesitated—and once we figured out that we could probably make it work, another buyer had made an offer. It’s something we still think about from time to time, and I share this experience with the people I help.”


Watch: The Features That Help a Home Sell Fastest

Source: realtor.com

Dear Penny: Should We Use 90% of Our Savings to Buy a Home?

Dear Penny,
It sounds like four options are on the table: holding out for the “right house” in the city, the cheaper home in the up-and-coming neighborhood, a condo or staying where you’re at.
Buying your dream home doesn’t buy you your dream life. You could buy the perfect home in the city you love. Yet life will still be boring if you can’t afford to experience big-city life because housing costs are draining your budget.
My boyfriend and I are both 34, have been together 10 years, and make about ,000 a month together after taxes. I contribute 5% of my annual pay to charity. We have no other debt except my student loan debt from graduate school, which should be paid off in three years. 
Also try to be realistic about what city life would look like for you. Visiting a place is a lot different from actually living there. If you’re homebodies now, a move to the big city probably isn’t going to transform the two of you into a pair of jetsetters.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].
Ready to stop worrying about money?

I don’t think you should use 90% of your savings to buy a home. That’s not to say using 90% of savings for a home purchase is always a bad move. In fact, in today’s overheated real estate market, spending a large chunk of savings is the only way many people will become homeowners. But I doubt that the ,000 you’d have left would be enough for the recommended six-month emergency fund. The fact that spending gives you anxiety makes me think you should proceed cautiously.
It’s true that buying a home is an investment, and real estate tends to be a good investment over time. But more importantly, your home is a place to live. Focus more on what you want out of life first and less about the future resale value.
Also, most of the homes are outside of our price range in this city. We can’t decide if we should buy a condo, which we don’t like the idea of, wait for the right house, or buy a cheaper house in an up-and-coming neighborhood. I am worried a condo won’t have good resale value, or even be impossible to sell. Should we buy a second home? Should we buy a condo or keep trying for a house in our budget? 
The condo is easy to rule out. You doubt its value as an investment, plus it doesn’t sound like you want to live in one.

About four years ago, we bought a small, inexpensive single-family home near where we work. The home was less than what we could afford, so that we could save and eventually move back to a city we both love that is very expensive. We intended to keep the house and rent it out when we moved, as a way to diversify our investments. 
Dear Unsure,
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In the past 10 years that we have been working, we have been able to save about 0,000. I am thinking we should use 90% of our savings to finally move to the city. I am nervous that if we wait, we will be priced out again due to high home costs, rising interest rates and inflation. 
So that leaves you with two choices: moving to the up-and-coming neighborhood in the city or staying put. I can’t tell you which is the better option for you. It boils down to whether you crave stability and connection over the novelty of a new city.

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-Unsure Investor