Price, Shmice. Why looking for a 'good deal' isn't always the best way to buy a house.

When buying a house, price is always a factor.  Always.  But at what cost will you chase 'the good deal' in lieu of finding the perfect home?

Sometimes price isn't king for many home buyers.  Not to say that you should throw money at the first house you love.  However, when shopping for a house, it's never a good idea to rule out a home that you might love simply because there is another house with a better price.

"A house affects so much of your life," said Will Lipovsky with First Quarter Finance. "Living in a beautiful house improves my mood quite a lot.  Excellent location, fine craftsmanship, and plenty of space...it's worth spending a few extra dollars in my opinion."

Affordability

I will certainly never suggest living outside your means, or committing to a mortgage on a house twice your budget.  But upping your budget to cater to better location, better amenities that cater to your lifestyle, bigger floorplan to grow into can make a huge difference without causing financial ruin.


Consider this:

Principal and interest (P&I) on a $200,000 house at four percent is $954.83 per month. Raise that budget to $250,000, and the P&I goes to $1,193.54. Will that $50,000 make the difference between a starter home and a dream home? Maybe not. But in a first-time buyer market, it can greatly improve the location, the space, or both, and all for $238 a month.

P&I on a $400,000 house at four percent is $1909.66. Opt to buy a $500,000 house instead, and you'll pay $2,387.08 per month. The $477 increase in your monthly payment can make a world of difference in the house you buy, and how you feel about it.

The term 'house poor' sounds awful, because it is!  You certainly don't want to over buy, and you certainly still want to make a solid financial choice that will allow you to eat more than cereal and ramen noodles everyday.  But in this instance, isn't a home that you can be happy in and excited about, worth forgoing a Starbucks run a couple times a week, or brown bagging it to work, rather than hitting the drive thru?

There are many ways to find extra dollars to go toward your home.  Here are some options that can make an impact.

Eating Out.
A night out in a restaurant is no longer a novelty.  "Sales at restaurants overtook spending at grocery stores...for the first time ever, according to Commerce Department data released [in April 2014] for the first time since 1992," as reported by Bloomberg Business.


What does that translate to?  More than $6,000 a person for the average American. For many home buyers in the Jacksonville area, $12,000 is their annual mortgage expense.  Dinner out with your spouse could equal owning your home.

According to Forbes, "Americans go out for lunch on average twice a week and spend $10 each time. That means they're spending $936 annually." Between two adults, you just found almost $2,000 a year just by bringing your lunch. Will that buy you the estate with the view? Nah. But it'll get you closer to owning a home, which is the first step to financial freedom and wealth.

Check Out Your Ride.
Are you driving the latest model with all the bells and whistles?  If the answer is yes, you're likely paying close to $700 every month for your vehicle.  Which could translate to a monthly payment on a home priced around $120,000, depending on loan type and fees.  You don't need to necessarily get rid of your ride.  You could possibly trade it in for the next lower model type, or perhaps negotiate a lower interest rate on the payments if you've been current and on time.  Or, even, go with a hybrid.  There's a couple hundred dollars a month in gas, saved!

Declutter and Downsize.
Antique furniture sitting in the corner of the garage, old electronics collecting dust in the attic, and old handbags you're never going to use again can make you money. Check sites like Huffington Post and Country Living to get an idea of the worth of things like antiques and collectibles. Other things might be eBay worthy. Mashable has a list of the "9 Valuable Things You Didn't Know Are Lying Around Your House." (Pokemon cards? Really?)

Crowdsource It.

Have a birthday, wedding, or anniversary coming up? Let your loved ones contribute to your down payment.
Need more ideas? The Simple Dollar has 100 - yes, 100 - more ways you can cut back and save money. Soon, that dream house will be right around the corner!