Do you know how to budget for homebuying?
The first step to preparing for home ownership is to determine where you stand credit-wise and financially. Checking your credit and figuring out how much home you can afford will plant your feet firmly on the starting line.
It is recommended that you create a budget of what you currently spend each month and factor in a mortgage payment in place of rent.
Start by adding up every source of income that is deposited into your checking account each month. Ex. Total Monthly Income $4,500.
Next, write down your monthly expenses, not including rent. Ex. Total Monthly Expenses $3,000.
Now subtract your monthly expenses from your monthly income. The remaining total is what you have to spend on housing costs. Total Housing Expenses $1500.
Finally, make adjustments if you do not fall within the desired affordability range. Want to afford more? Eliminating debt may increase the amount of home you can afford, make room for extra costs such as insurance and taxes, and will positively impact your debt-to-income ratio.
Think about what your budget will be once you make your home purchase. Be sure to consider how much you want to save for emergencies.
Have questions or ready to begin your home ownership journey? Join Landlord Breakup to get started.
Wanauma Graham is a Texas Real Estate Agent and Home Expert for Landlord Breakup, a program which seeks to motivate, encourage, and support renters who want to become homeowners. Learn more at LandlordBreakup.com.
About Landlord BreakUp
Landlord BreakUp is the renter’s path to home ownership. LBU helps renters prepare for home buying, takes them through the home buying process, and offers exclusive homeowner services.