Planning to Buy Real Estate - How to Budget for 2025

Have you been considering making your first real estate purchase year after year with no idea of how to get started? Don't let another year pass you by: keep these budgeting tips in mind to make sure that 2025 is the year you can finally make your move.

1. Prequalification

   It's the magic word - a mortgage prequalification is always the best place for first time buyers to start. Meeting with a bank or lender to get prequalified will give you a maximum amount that you'd be able to borrow for a mortgage, which will not only help to narrow down the price range for your search, but will help you to calculate exactly how much you'll need for a down payment.

2. Saving for a Down-payment

   As a follow-up to Point 1 above, once you have a property price point after your prequalification, you can start to eye 10% of this price as a down-payment. Of course, closing fees like taxes and legal fees are also paid toward the end of a sale, but focusing on saving for the down payment is a more manageable place to start.

3. Work Out Your Monthly Budget

   This is a step that can humble you as much as it opens your eyes. For at least one month, track every expense from groceries to takeout to electricity bills to gas and everything in between, take this amount away from expenses. Now the hard part: deduct any non-necessities from the list and make note of the final number. This number is what you should aim to spend monthly until you've achieved your down payment goal.

4. Hustle, hustle, hustle

   No one wants to hear it, but sometimes you have to lock in for a short period to achieve certain goals. If it isn't possible to cut any more expenses from your current budget and you need to reach your down-payment goal sooner, consider temporarily taking on a part-time job or side-hustle. Figure out how much you can healthily manage and balance, give yourself a time-frame and keep your eyes on your goal.

Getting serious about your budget can be anything but fun, but the reward is way more than worth it. If you need any help along your way, feel free to reach out for more personal tips and advice.