Creating a budget for a new house can be hard – budgeting for the grocery still can throw me. But we all know it’s important to understand where our finances are at in order to make wise decisions, especially when it comes to a big purchase like a new home.
So here’s a few tips to help you budget for a new home:
Your expenditure on a new home should never be more than 50% of your income. Basically, if you bring in $4,000 a month, we recommend that you keep your monthly payment below $2,000 – that includes your mortgage payment plus premiums and insurance.
Figure out your monthly expenses currently. Knowing exactly how much goes out each month can help you determine how much free income you actual have and what percentage of it you’d feel comfortable setting aside each month as you budget for a new home. This is like a “pre-home” budget.
Give your budget for a new home breathing room. As in… think through what your future could hold. Kids? College savings accounts? Home repair costs? Say you are planning on having a child within the first few years of buying your home, and you start laying aside savings each month for childcare related expenses. That could change how you balance your mortgage payment, so make your budget for a new house realistic for what your actual hopes and dreams are, not just the most floor space you could possibly afford.
BONUS TIP: Keep a consistent job. In thinking about money, people often wonder about what benefits a new job could possibly bring them. Lenders look for you to have two years of employment in the same line of business before they offer you a mortgage – so keep that in mind if you were planning to make any big moves in your career!
We hope this helps you plan a budget for a new house! We know this is a fun time to dream of the future – and it also can bring a whirlwind of questions. If you are looking for a Christian Mortgage Lender, give us a call! We value the same things you do – faith and family. We’d be happy to help!
Best,
Audrey
The Christian Mortgage Mom
