How Much House You Can Afford?

1. Calculate 30% of your monthly take home pay-

A good rule of thumb is to not let your monthly mortgage payment exceed 30% of you net take-home pay to avoid being house poor.

2. Determine Final Purchase with Online Calculator-

Back into your total mortgage budget using your number from step 1 by playing with numbers using an online calculator with various downpayment amounts, interest rates etc. 

3. Estimate Closing Costs-

Don't forget to factor closing costs into your total home budget! These  are often overlooked. Ask your lender for a detail list of closing costs so that you are prepared..

4. Factor Additional Homeownership Costs into Your Budget-

With homeownership comes additional expenses- utilities, repairs maintenance, supplies, etc. Don't forget these!

5. Save For Your DownPayment-

Aim to save at least 5% for a down payment. You can avoid PMI  by making a 20% down payment on a conventional loan.  The best route is a 15-years, Fixed-rate conventional loan if you really want to save. .