Buying a home is a big decision. Since it is something most people do not do too many times in their lives, it might be difficult to know exactly how much of a mortgage you can afford. Here are three easy steps to help you figure out how much of a mortgage you can handle without going broke in the process.
Create a Budget
Your first step is to create a budget so you can easily see how much money you have coming in compared to your expenses. Be sure to include both short-term and long-term investments and other savings. Make sure you have at least six months worth of mortgage payments in your short-term savings in case you experience an unexpected financial setback.
Factor in Increased Expenses
When you buy a home some of your expenses will increase and you will also have some new expenses that you have not had to worry about previously. You will need money for homeowner’s insurance, property taxes, utilities and possibly home owner’s association dues on top of your mortgage payment. You may also need to make repairs, whether you know about them when you purchase your home, or they become necessary later.
What is Your Ideal Mortgage Payment?
Your budget will spell out exactly how much money you have left over to pay your mortgage. If you can’t afford the mortgage payment you want to have, you will need to adjust some of your budget. For example, you can look for ways to lower your car insurance costs or take a less expensive vacation.
Buying a home is exciting. But, you must be fiscally responsible about it. Before you jump into the home-buying process, have a plan, do your homework, and act wisely.
We can help set you up with a knowledgeable lender who can walk you through the mortgage process and get you pre-approved. Once you are pre-approved we can help you find your dream home and negotiate the deal!
Call or text us today at 801-821-9400 to set up a free consultation!