Window shopping for a new home is exciting, and it is often one of the first experiences one has before they gear up to start looking in earnest. While window shopping is fun and definitely important, there are a few more preparations you will need to make before you truly begin your home search. Home window shopping can show you what the housing prices in the area are, it can show you what you like and don’t like, and it can give you a good baseline as to what you are looking for in a home. Once you are finished window shopping and ready to begin looking at homes to buy, figuring out just how much house you can really afford should be the first order of business.
There are a lot of expenses to consider when it comes to homeownership. You have your mortgage, utilities, food, gas, entertainment, investments, loan payments, and more. When all is said and done, you may not realize just how much of your budget really goes to general living expenses once you sign that dotted line. By carefully determining how much house you can afford, you can have a confident experience knowing that you will be able to afford your home while still maintaining your quality of life.
How To Calculate Your House Budget
Determining how much house you can really afford will mean taking a few things into consideration. These are the steps you can follow:
- Add Up Your Total Monthly Income – To start, you will want to add up your total monthly income. If you bring home roughly $2,000 per month and your partner brings home around $3,000 per month, your total monthly income would be around $5,000.
- Cut It To ¼ - Your maximum mortgage payment should be around ¼ your total monthly income or less. To determine what your affordable mortgage should be, take your total monthly income and multiply it by 25%.
- Consider Your Home Ownership Costs – For many local renters, some utilities are totaled into the cost of rent, but this is not so when you own your own home. Additionally, you will be responsible for making your own repairs, purchasing appliances, and taking care of any ongoing upkeep. In making educated estimates, consider those home ownership costs and factor them into your estimated mortgage payment.
- Talk To A Professional – After getting a rough estimate of your budget, it is time to talk to a professional about pre-approval and learn more about the home buying and ownership process.
Getting The Dream Home You Can Afford
Knowing what you want and determining what you can afford are two major steps to making your dream home a reality. An ideal home you can afford is a home you can feel proud of every single day. To learn more about budgeting for the home you have always wanted, contact Titan Lafayette Real Estate today.