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Buying a home is a HUGE milestone, and it’s also one of the largest financial decisions you’ll ever make. The last thing you want is to overextend your budget or feel that dreaded buyer’s remorse a few months after buying.
That’s why I always recommend my clients understand exactly what they can afford comfortably before they start scrolling listings or touring open houses. You can follow these 4 steps to budget for your dream house like a pro!
1. Get pre-approved–not just pre-qualified. Pre-approval gives you a realistic look at what a lender is willing to offer you for a mortgage based on your actual financials. A pre-approval also shows sellers that you’re serious, which can give you a major competitive edge when you find ~the one~.
Understand the total monthly payment. The mortgage payment for a house is just one piece of the puzzle. For each house you consider, you also need to factor in:
- Property taxes
- Homeowners insurance
- HOA fees
- Utility costs
Together, these numbers will give you a more accurate picture of what your monthly payment will look like.
3. Know your spending comfort zone, not just your approval limit. Just because a lender approves you for $600k doesn’t mean you should spend $600k. Instead of just trusting that number, think about your current lifestyle, other expenses, and your future goals. What’s the price range that lets you love your home and your financial freedom at the same time?
4. Leave room for the extras. It’s easy to forget that moving comes with surprise expenses like new furniture, moving costs, and small renovations. Budgeting for those ahead of time will help you feel financially prepared from day one in your new place.
At the end of the day, the goal is to find a home that you love and feel completely confident in owning. That sweet spot exists, and it’s totally within reach if you follow these 4 steps!
Need help running the numbers or connecting with a great local lender? Contact us and we’ll help you out!
~ The Hanks Realty Group
