How to Budget Home Buying? Are you considering buying a first home, a second home, or a bigger home? We have amazing homes on The Main Line, but before you get swept up liking homes online, you need to create a budget. I specialize in helping buyers, whether you are buying for the first or second time, in finding the homes of their dreams, getting financing, and figuring out how to take this next step.
First, you need to figure out how much you can reasonably afford to spend on a home. Check your credit, if your credit is good, the more you will be approved to borrow, then check the interest rates on loans, which are still relatively low, and consider the amount you will need to put down and set aside for closing, moving, and incidentals related to the move.
Next, figure what you will need to have saved for a down payment. Right now, we are seeing lenders being more cautious and requiring closer to 20% down payment. Remember to factor in the closing costs which are roughly 2-5% of the purchase price.
Then you will need to account for ongoing expenses. Depending on what you will be bringing, you will need moving, furniture, paint and appliances for your home. You also need to factor in the ongoing expenses that include property taxes, insurance, interest, homeowners association fees, and your mortgage principle.
Considering these factors, lenders recommend that you spend no more than 28% of your gross monthly income on a mortgage payment (including principal, interest, taxes and insurance) and account for your current living expenses. There are a number of great resources on my website and I am an expert in helping buyers find ways to afford the homes of their dreams. Contact me to set up a time to discuss your home buying future.
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