How To Budget To Buy A House
Over the years that we’ve worked in Real Estate, one common question that many people have asked us is: how important is it for me, the consumer, to know my monthly budget so that I can buy a home?
The answer to this question is it’s very important, that’s why in this post, we will share with you the reasons why budgeting is important when buying a home, and how you can get started with creating a budget, even if you don’t have any experience with budgeting.
Why Is Budgeting Important When Buying A Home?
Knowing your monthly budget right now will help you to know what you’re going to feel comfortable paying for a house on a monthly basis, especially when it comes to your principal, interest, taxes and association dues (PITIA).
How To Start Budgeting
Getting started with budgeting is much easier than you think. To get started you will first need to gather all of your bills including your credit card statements, auto loan, student loans, insurance and other financial commitments that you have on a monthly basis.
Many budgeting experts recommend that you spend no more than 50% of your monthly income on your essential expenses like housing, utilities, groceries and transportation, while 20% of what your make on a monthly basis should be spent on things like debt payments, savings contributions, and retirement accounts.
For the remaining 30% of your monthly budget, you should be spending it on your lifestyle choices including cell phone, Internet, cable television, GYM membership, charitable giving etc.
If you find yourself paying more money for payments like credit cards, you may want to consider paying off some of your credit cards or choosing a more affordable cell phone plan before applying for a mortgage loan because this will make it easier for you to afford your housing costs on a monthly basis
Let Us Help You Purchase A Home You Can Afford
When you know your budget and what you will feel comfortable paying for your housing costs, you will avoid overextending yourself financially and the real possibility of purchasing a home you can’t afford.
During the Real Estate market of the early 2000’s many home buyers overextended themselves when they purchased homes for their primary residences or investment purposes and they lost those homes to bankruptcy, foreclosure, and short sale, especially once the Real Estate market crashed between 2007-2008.
Our goal with every new client is to sit down with them, talk about their budget and help them buy homes that they can afford and will enjoy for years to come.
Contact Fred Sed Realty
To learn more about the importance of budgeting when buying a home, or to view homes for sale in Southern California, contact Fred Sed Realty by calling us at (800) 921-9231 or connect with us online.