Home browsing can be a lot of fun. I love looking at homes that have been completely renovated with the latest upgrades, in the best neighborhoods and usually a bit out of my budget. Actually sitting down to sort out what you can afford is a lot less fun. A little reality check doesn’t mean you can’t buy your dream home, but it does often narrow the options. In my case, by a lot.
The mortgage you can afford depends on many factors. Annual income, down payment and interest rate are a good place to start. My list also includes regular Starbucks runs and Target trips gone wrong. You may have little league or music lessons to keep in mind. Everyone’s circumstances are unique, but a mortgage calculator is a great place to start. Figure out what you think you can afford before the banks tell you what they think. You know better. Their forms don’t typically include a coffee, wine or sale on your favorite jeans section. If you don’t want to give up your little luxuries, budget them in.
A well rounded budget should looking something like this:
Mortgage (Target Mortgage of Your New Home) // Credit Card // Car Loan // Student Loan // Utilities // Gas/Electic // Phone // Internet // TV // Water/Sewer
Life // Auto // Home // Health
Savings and Investments
Emergency Fund // College Savings // Retirement
Groceries // Child Care // Vacation // Entertainment (movies, dining out, etc.) // Clothing // Gas // Commuting (parking, etc.) // Charitable Contributions // Out-of-Pocket Medical Expenses // Your Version of Target Gone Wrong
Once you’ve narrowed down your budget, take a look at our Mortgage Qualifier. This will give you a good visual of how your monthly payment breaks down and will help you set the parameters of how much you can afford.
Next step, set up a personalized search. Don’t waste time searching for new listings every day. Have them sent directly to your inbox! Still not sure exactly where you want to purchase? Setup and save multiple searches. Save your favorite homes to visit with your Alta Agent.