How much of my income should I spend on my mortgage payment? Be realistic when budgeting for these new expenses. Similar to maintenance and repairs, your utilities could be more depending on the age and size of your house. An average-sized household spends $2,060 a year on utilities. This includes any recurring monthly costs such as lawn care, pest control, pool care and fireplace upkeep. If your air conditioner broke, for example, it could cost $5,000 on average to replace it. If you buy an older home, you may want to budget more per month than you would a brand new home. Consider the size and age of your home when budgeting for repair costs. Once you purchase a house, there are recurring expenses to budget for: Inspection costs vary by location and size of the home. Once you find a home, you’ll want to have it professionally inspected for any potential issues. This means if you purchase a home for $300,000 with a 3% closing cost, you’ll pay $9,000 upfront, not including the down payment. Closing costs can run anywhere from 2% to 5% or more of the total loan amount, depending on your lender. Some lenders accept down payments as low as 3% - and 0% for USDA and VA loans - so how much you need to save will vary by loan type.
You’ll need to budget at least 20% of your home’s expected value if you want to avoid paying private mortgage insurance every month. While housing costs may vary, there are some common upfront costs to budget for. Review your budget frequentlyīy proactively reviewing your budget, you’re able to adjust your plan as needed to help accomplish your goals. This takes the guesswork and pressure off of having to do it yourself. If you know you’ll save $500 every month, for example, have $500 automatically deposited into your account. Once you’ve chosen your bank account, set up automatic payments. Pick an accountĬhoose which bank account you’ll store your savings in every month until you can purchase your home. Dedicate a certain amount toward saving for a home, building your emergency fund, debt repayment or any other goals you have.
If you end up with extra money in your budget, put it to work. If it’s negative, you may need to cut back.
If the number is positive, congratulations – you’re spending less than you make. Subtract your total expenses from your total income. Create your budgetĪdd up all your income. Having a clear picture of these items allows you to create a realistic plan for how soon you can buy your house. Look at your savings, mandatory monthly expenses, discretionary spending, debts, investment accounts and more. Gather every piece of information you can on your current financial picture. How much do you expect to pay for your new house? Research the cost of homes in your area and determine how much you can realistically afford. A few steps to kickstart your budget and begin saving: 1.
0 kommentar(er)
