Finding An Affordable Home

• Price is the biggest sacrifice you can make. Consider buying a home that is 20% less than your banker tells you that you can afford. That will have a huge impact on your ability to pay every month.


• Cash in the bank is also a huge positive impact on affordability. Force yourself to save a 20% down payment. This immediately means lower monthly payments, lower interest rate, and avoids private mortgage insurance.


• Neighborhood and location may need to be sacrificed somewhat. Look for a home just outside your ideal neighborhood. Locate near public transportation or within a short drive. You want to have easy access to work and recreation, but also stay out of the priciest neighborhoods.


• Home type can make a big difference. If you don't want to compromise on the location, but the single-family homes are too much of a financial stretch, consider a condo, townhome, or a duplex. These housing types make finding an affordable home easier, but may still give you the address you're after.


• Square footage may need some trimming. "15% of Trulia's ‘American Dream' survey said they now like to purchase a home with 2,600 plus square feet." Look for open floor plans and outdoor access. This will make a smaller home feel larger.


• Move-in condition costs money. Look for homes that need a little fixing up and TLC, and consider improving the home yourself after move-in.


• Extra bedrooms cost money. Consider buying just what you actually need to live and look for extra space in a den or in basements and attics.


• Outdoor space can greatly enhance your pleasure with your home, but land comes at a premium. Consider compromising with a deck or patio without paying the price of living on the edge of wooded open space.


• Buying by yourself may be your ideal, but consider getting some help. Parents can legally "gift" $14,000 each to children per year, which could make a big difference in the cost of a mortgage.