subject: Use A Home Affordability Calculator For Effective Budgeting! [print this page] For first-time buyers, the dream of owning a home is more attainable than ever. But that doesn't mean that it will be easy for every individual or family to get the keys and settle in. Owning a home is a big responsibility, and, often, a big expense. Can your budget handle the pressure? Let's find out.
The down payment has to be your primary concern, as it's the first ingredient required for home acquisition. Many first time home buyers qualify for an FHA loan, which allows a relatively small down payment. Talk to a real estate agent in order to secure all the details and find out how much that would be for any properties you are eyeing or the price range you are seeking.
Financially speaking, it is best to accumulate the money for your down payment through careful planning and saving. If you are not planning to purchase for another several years, then you may want to talk to an expert at your bank to find out about specialty interest-based savings plans. Though interest rates are low right now, they are better than nothing!
If necessary, however, I know from experience that you can take out certain types of loans to contribute to the initial deposit on your new home, as my spouse and I borrowed against our car in order to secure our townhouse. We were able to pay it off with our first time home buyers' tax credit, but if future funds will not be available to you, then you need to calculate additional loan payments into your future finances.
Financial experts recommend that you have at least six months' worth of expenses tucked away for a rainy day to assist in cases of unemployment or disability, and you will want to have at least two or three months available to you before you move in to your new home, so using a home affordability calculator, you should determine precisely how much money you need to have set aside for your emergency fund.
The home affordability calculator, available in many places across the internet, is a useful budgeting tool. Make use of it! According to financial professionals, your mortgage should only take up a quarter (or less) of your monthly income, so if the house you're eyeing would exceed that, then you may want to wait a little longer or look elsewhere.
Once you have put forward your down payment and built up your nest egg, you might think you can spend where you want, when the fact is that you need to save a bit more for monthly maintenance costs, as you will now be responsible for paying for those things, as you would not have been in your apartment.
Considering how much money you will need to live comfortably, with peace of mind, in your new home may be daunting. But with proper preparation and careful consideration, you can attain your dream of having a house of your own.
