HOW TO BUDGET FOR YOUR NEW HOME | HOME BUYER TIPS
Buying a home is super exciting! I mean, you are about to achieve the American dream of homeownership. But how do you budget for a new home? Let’s dive in!
If you haven’t already, be sure to check out the video and blog we did about a real life example of the costs to own a home. We went in depth and broke everything down.
But just a quick recap: All mortgage payments, taxes, insurance, HOA dues, utilities, cable, internet, and maintenance costs added up to about $2,500 / month. Keep in mind, that number changes depending on the location of the home, your interest rate, down payment, etc..
WHAT’S YOUR TAKE HOME PAY?
The lender will qualify you using your gross income, but you need to know your actual take home pay monthly in order to properly budget for a new home. When you have that number, go ahead and subtract your expected mortgage payment.
Add up any additional monthly expenses like a car note, cell phone bills, credit card payments, groceries, childcare, etc… Now do the same thing that you did above. Subtract this number from what was left over after subtracting the mortgage payment.
What does that number look like to you? Is that something you are comfortable with? Do you have enough “fun” money left over? How much can you put into a savings account?
When it comes to buying a house, don’t stretch yourself too thin. Make sure you have enough left over to put in a savings account to prepare for a rainy day. If you get laid off or you have a family emergency, at least you have a safety net. You should be putting away at least 5 to 10% of your income into a savings account.
CONSULT WITH A FINANCIAL ADVISOR
Talk with a financial advisor if you have one. They will be able to help and guide you if they believe you are making an over the top purchase.
If you are a visual person and would like to play around with an affordability calculator, click here and put in your details.
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