The best first step
Before looking at Real Estate Ads or visiting Open Houses, take the best first step – review your budget carefully. Determine what you can afford as a monthly mortgage payment.
This is your home
Don’t focus on what your friends paid for their home or how large their home is. This is your home. You will be making the mortgage payments not your friends, family members, co-workers, real estate agent or lender. Don’t be pressured to buy a home above your budget.
Consider other home expenses
You will have additional monthly expenses for your home. Real estate taxes, homeowner’s insurance, or HOA (Home Owner’s Association) fees. You also need to plan for maintenance expenses. Things break and wear out over time. Keep a savings account and budget monthly for future home maintenance.
It’s a worthwhile exercise to complete our Budget Worksheet below. Lenders use gross earnings to qualify you for a mortgage loan, but you don’t pay your bills with your gross pay. You pay your monthly bills from your net pay. This is actual income deposited to your checking account. An accurate monthly budget may keep you out of debt.
Don’t be mortgage poor
Leave room in your budget for investments and for your retirement. Remember the saying, “don’t be mortgage poor”. It’s also wise to have money for entertainment, travel and recreation. Manage your home expenses or your home expenses may manage your lifestyle.