Know Your Budget Before You Buy

There are many things you need to consider before buying a house, however there is one that should take precedence… your budget.


Most people don’t take a good hard look at their budget and crunch numbers before buying a home. It really is the smartest thing you can do to prepare for acquiring a new home. First, add up all of your income, if you are a couple, add together all sources of income, AFTER taxes. Then add up all of your monthly expenses, this includes everything from utility bills, to credit cards, car loans, food, entertainment, dry cleaning, hair cuts, etc. You must take everything into account to see how much you can comfortably spend on a mortgage payment each month.

However, you must also leave enough room in your budget for the expenses of being a homeowner – repairs, appliances, decorating, etc. This will give you a nice buffer when you come across unexpected expenses and it will help you in deciding on whether you can afford the repairs on the “fixer-upper” you thought would be a great deal or go with the one in better shape.

Thoroughly planning a budget will ensure a much more enjoyable homeownership experience.