What price home can Home Buyer afford?
First determine what kind of mortgage a first time Home Buyer can afford. That will help determine what price house you can afford.
Building a budget is no fun,To begin, add up all the monthly expenses other than the house payment.
In addition to the big items -- loan payments, groceries and savings – don’t forget the little things.
How much is spent on transportation?
Dining out to eat?
Dry cleaning?
The little items add up, so to really be accurate try to track every penny you spend for a week, and base your spending on that.
Keep Mortgage to 28% of income A simpler way to gauge how much Home Buyer can afford each month is to use a percentage of own income. A general guideline that many lenders use is that no more than 28 percent of Home Buyer's total monthly income should go toward the mortgage payment (including taxes and insurance) and that no more than 36 percent of the total income should go to pay total debt, including credit cards.
The total monthly payment will include property taxes and homeowner’s insurance. It also costs money to maintain a home, so make sure to leave a room to pay for home improvement projects and regular maintenance. If First Time Home Buyer are moving from an apartment to a home, consider the need to buy more furniture or purchase appliances. Most First Time Home Buyer find that they spend a lot more moving into their new home than they anticipated, so consider a room on the budget so you can make your new house your home.
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