Purchasing a home is a big move that requires smart planning, and it needs to start at the moment the idea is conceptualized. Setting a budget for buying a house is one of the primary tasks any prospective homeowner should have high on his or her list. We understand that the process can be overwhelming. To ease some of the stress, let’s take a look at some of the steps that should be taken to create an excellent budget for a new home.
Take a look at the details
Real estate agents are quick to let prospective homeowners know that the mortgage of a home is not the only important element to consider when setting a budget. Families will be surprised to find that homes incur many more costs upfront, such as property taxes and the first month’s amenities. Taking these things into consideration will help prospective homeowners open their eyes to the true costs of getting their own place. The information about what to expect given the house and neighborhood in question should be available through a real estate agent or from the previous homeowner.
Do the math
To figure out the maximum amount you and your spouse can spend on a home, multiply your combined income by three. This rule of thumb makes it easier for people to manage not only their budgets but also their expectations. If the combined total gives you a wider berth when it comes to available homes, then it makes the process faster and easier. The right calculations can ease a lot of stress.
Do more of the math
Here’s another rule of thumb that most mortgage companies follow: house payments should not exceed 25% of your monthly income. Therefore, to make sure you secure a mortgage for the house you plan on buying, factor this percentage into your budget. If you’re a first-time homeowner, don’t worry about not getting the bells and whistles you hoped for. If you select a home appropriate to your financial circumstance, it will be easier to save up for a future upgrade.
Use online tools
There are several online tools for those looking to purchase a home. They include mortgage calculators and spreadsheets that can help people track amenities. Using these tools gives prospective homeowners a leg up at budgeting correctly and avoiding properties beyond a certain price range. There is nothing worse than falling in love with a piece of property only to let it go because of its price.
Contact a real estate agent
Reaching out to a real estate agent can be extremely helpful when setting a budget for buying a home. An agent can help future homeowners shortlist properties that fall within a given price range. They will also calculate all of the additional costs that come with buying a home. Look for a reputable local agent that specializes in the kind of home you’re looking for.
At Pagnotta Homes, we believe in helping people find the home of their dreams. Let us know your search criteria, and we’d be happy to find you the best match in Central New Jersey. Contact us today at 908.436.7947 to get started.