A key factor to consider when you’re purchasing a home for the first time is if you will be able to keep up with your monthly expenses along with your mortgage payment. Planning ahead is a must. First time home buyers need to make a budget that they will feel comfortable sticking to once their home is bought.
Evaluate where you’re at. Look at your current housing budget and consider how comfortable you are with it. How does this budget impact your other lie desires and needs? Can it accommodate things you aspire to, like travel or starting a family? If your rental budget is comfortable, then it will likely make a comfortable budget for a mortgage, but be sure to factor in all expenses including a budget for repair savings.
Make priorities. Sit down with yourself and decide what you’re looking for. Set some goals. Think about what neighborhood, payment, and interest rates you want. Think about what features you want your home to have. But also…
Be realistic. Be prepared to compromise. There is no such thing as the perfect home, and you may not be able to get everything you want. Also, be sure you’re not confusing your needs with your wants.
Document your spending. It’s important to know where your money is going. If you feel you’re unable to buy a home, look closely at your spending habits. There may be costs you can cut down that will make it more comfortable for you to purchase a home.
Start with your ideal monthly payment in mind. Rather than picking a purchase price based on what you’re approved for, focus on what you would ideally want your monthly payment to be – including property taxes, insurance fees, etc. Then decide on how much cash you have for the transaction. Then you’ll bring you numbers to a lender and get advice on what that should mean for your purchase price.
Consult with a mortgage lender. A mortgage lender can research your finances and determine how high of a loan amount you could get pre-approved for. This is crucial information for setting a budget.
Following these steps, you’ll find the budget that works best for you.
If you have more questions about the particulars of home buying, you can rely on Stonebridge Mortgage Group to help guide you through the home buying process. We help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. We serve the greater Portland area and are in Gresham, Oregon.