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By Citizens Bank Staff
Buying your first home is one of the most important and exciting financial milestones in your life. But before you hit the streets with a realtor, you need to have a good sense of a realistic budget. Just how much house can you afford?
Some homebuyers get overly ambitious at this point. They either buy a home that scrapes the ceiling of their purchasing limit or take on an HGTV-worthy renovation project. It’s important to make sure you understand how much you can reasonably afford to spend so you don’t get in over your head.
When purchasing a home, experts suggest keeping your monthly payment to less than 28% of your monthly income.
Your lender will tell you what they’re willing to lend you based on the following:
It’s up to you to determine what additional obligations you have to consider. If you’re planning on having a baby, getting married, or paying for college, your lender won’t take these expenses into consideration when they give you a pre-approval quote. It’s up to you to make sure you have a realistic picture of your financial situation.
Finding the right real estate agent is essential. They’ll not only help keep you on track, but a good agent will negotiate on your behalf to get you the best deal possible. Depending on the size of their network, they may even have access to homes before they hit the market, which can help get you ahead of other home bidders. Your real estate agent can be your most valuable advocate throughout the home-buying process, so it’s important to choose someone you’ll with whom you’ll enjoy working.
It’s extremely important to establish a strong financial foundation before making the commitment to purchase a home. An emergency fund of three months is a great place to start. Speaking with a financial advisor to be sure you’re making the best choice for your situation can help to alleviate some of the nervousness that accompanies buying a home for the first time. Our Loan Officers are committed to helping you find the home loan solution that works for you. To learn more, call us at 1-888-514-2300 or click below to get started.
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