Budget When Buying a House

If you decide to buy a house, there are some important factors to consider. Budgeting is extremely important.  It’s not just how much money you make; it’s also what you plan to do with it.

Try to project what the next five years or so will be like for you and your family. Are you planning to have kids in the next few years? Is your teen graduating from high school? Will they need you to co-sign for a college loan? Are you planning for a wedding?

All these can raise your debt-to-income ratio. Even if you can afford a mortgage with a 40% debt-to-income ratio now, life events like having children can bring that ratio up to and over 50%.

Plan for the house you can afford today—not what you can afford a few years from now when the raise kicks in. Home ownership isn't as simple as paying the mortgage. You can be sure other expenses will pop up. Repairs, general maintenance, condo fees, utilities and buying new furniture for your new home also need to be anticipated.

The more thorough your budgeting, the more comfortable you’ll be when shopping for a home.

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