How Much Money Do You Need In Order To Purchase A Home
Newly married and both with stable jobs, my hubby and I decided that we want to buy a house while we can
still do so. The plan is to have a house before children so that we have a stable environment to raise them. But young
and excited as we are, we did not know the process of buying a house, and so we consulted a real estate agent,
who is a very close friend of ours. He explained to us that buying a house is one of the most financially challenging
steps that we would have to take and endure. Therefore, we should be fiscally ready. The real estate agent also helped us
determine how much money we need in order for us to buy a house.
I'm sharing what my real estate agent advised me so it can be helpful to you who may be planning to buy a
house too:
How Much Income Are You Currently Bringing In
First and foremost, you need to consider how much money you are making. How much you earn is a great factor
in determining how much money you need to buy a house. The amount of money that the banks or lenders
grant you is based on your income and ability to pay. How much you are willing to spend also plays an important role
because your income does not only go to the house you are buying but also to other expenses like food and bills.
You need to decide how much you can set aside for the down payment of the house plus other fees and the
monthly mortgage.
How Large Of A Mortgage Can You Get
Before looking for a house, it is important to know how big of a mortgage you can afford so you will know the price
range that will fit your budget. If your income can easily get you a $180,000 mortgage then your price for
a house should not go beyond $200,000 and you can save $ 6,000 for the down payment. There is a variety of
mortgage offers for you to choose from. Some lending institutions offer lower interest rates than others;
allow no down payments and finance the closing costs.
The Amount of Money You Should Set Aside
Our agent also told us that it is not wise to rely on mortgage alone when buying a house. You need to set aside
money for the sole purpose of buying a house because it is not a one-time deal. Although there are "no down
payment" offers, and the mortgage will be sufficient to the cover the initial cost, setting some money aside for
housing alone lessens the blow on your monthly expenses. Remember, most mortgages have an amortization of
30 years, so it is best that you have your wallets armed.
When we heard what our agent told us, my husband and I decided that we needed a little more planning and
saving before we push through with buying a house. It was then after a year of hard work and cutting on the
non-essential expenses that we were able to purchase a house that really meets our needs. In determining how
much money you need to buy a house, review your current financial position, and include everything that has
something to do with your money. Do not skip over any sources of funding and always work within your own budget to
avoid buying a house that you can't afford. In conclusion, a house is an investment that you have to protect. For more information on buying houses, click here.