How Much House Can You Afford? Budgeting for Your First Home
ByOlivier
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Using a Mortgage Calculator
Estimate your monthly payment with an online mortgage calculator before applying for a loan. This assists you in selecting a home price range that suits your budget.
Is It Advisable to Purchase at Your Maximum Approval Limit?
Although being pre-approved for a mortgage helps you understand what a lender is willing to provide, you shouldn’t necessarily spend that amount. Purchasing a property should enhance rather than diminish your long-term well-being.
How Much Time Is Appropriate for Your First Home?
It might be more cost-effective to rent rather than buy if you plan to move within a few years. Purchasing a property becomes more advantageous financially and gives you time to accumulate equity if you intend to stay there for at least five to seven years.
Typical Errors Made by First-Time Homebuyers
When creating a budget for your first residence, steer clear of these expensive errors:
- Underestimating the entire cost of housing each month
- Ignoring unstated costs such as HOA dues and PMI
- Using lender preapproval as your only source of funding
- Ignoring upcoming expenses such as upkeep or remodeling
- Using all of your savings for a down payment while leaving no money set aside for emergencies
