Whether you are moving out of your parent’s home or buying a house with a spouse or partner, purchasing a property of your own is a big step. For some people, owning a house brings a sense of freedom and happiness that cannot be compared with renting one. The benefit of having your house is that it’s yours. You can decide to do anything with it, like change the landscape, turn a room into a theater and you decide to paint the house any color of your choice. Another benefit is that your monthly mortgage payment comes back to you in the form of equity.
After deciding in your mind that buying a home is the right choice, the first thing is to determine what you can afford. Take time when choosing a home, you may easily find a perfect house, but it may not be affordable. Mortgage lenders may allow you borrow more money than you should, but you should consider whether you can make a monthly mortgage payment and still manage other financial priorities. In most cases, you will need to contribute a down payment of 20% of your desired home value in order to secure a mortgage. Many home buyers focus on the down payment and monthly mortgages costs when considering how much they can afford, but being a homeowner entails other costs as well. As a homeowner, you must take into consideration the costs of home insurance, property taxes, and any homeownership association fees or condo fees. Also the cost of maintaining and improving the home. Many new owners are often surprised by the unexpected costs that come up in the first few months of buying a new house. So you must make sure you have some saving set aside to take care of those expenses. Once you have considered your budget, review your savings, and other priorities, you will have a better sense of how much house you can afford.