Establish A Budget
So you’ve made the decision to buy a new home, but now what?
Where do you start?
GETTING STARTED
Here are some preliminary steps you can take before you even apply for a mortgage.
When you are ready to buy a home for the first time, it’s important to look at your finances and find out what you can afford. While mortgage programs and lenders vary, a general guideline is to spend no more than 28% of your gross income on housing costs. However, even that amount might be too high depending on your other expenses. If you don’t already have a budget, write down all of your regular expenses and determine what kind of payment you can feel comfortable making every month. Once you start house hunting, it will be easy to fall in love with a home that’s out of your reach. Having a number in the back of your mind will help you stay on track.
Where is your money going each month?
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Income |
Take home (after taxes, etc.) |
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Tips |
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Other forms of income |
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TOTAL INCOME |
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Fixed expenses |
Housing costs |
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Car payments |
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Car insurance |
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Utilities (water, electric, gas, etc.) |
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Student loan payment(s) |
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Credit card payment(s) |
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Savings account allocation |
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Phone/mobile service |
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Cable/satellite service |
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Other bills |
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TOTAL FIXED EXPENSES |
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Variable expenses |
Groceries |
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Dining out |
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Clothing |
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Entertainment |
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Gifts |
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Miscellaneous |
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TOTAL VARIABLE EXPENSES |
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When you have a detailed picture of both your income and your expenses, you can evaluate your spending, make adjustments and get an accurate look at how much you can afford to spend on a monthly mortgage payment.
Click Here To View More Information About Financing a Home