How to Budget for Your First Home
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Buying your first home is one of the largest and most important investments you will ever make, and it requires a lot of financial preparation. If you plan on purchasing your own home in the future, it’s never too early to start budgeting and exploring the mortgage loan options that are available to you. With more than 25 years of experience, My Home Mortgage is the premier provider of mortgage financing for first-times in Maryland, Virginia, and Washington DC. Read on to learn more about budgeting for your first home, and contact us today to get started!
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The 28% Rule
The 28% rule is a widely accepted industry standard that makes it easy to determine the price range for your first home. The rule states that your monthly mortgage payment should not exceed 28% of your total monthly income. Although some lenders will have no problem offering you a mortgage that exceeds the 28% rule, it’s a great benchmark to keep your purchase within your financial means. Of course, you also have to take any other debts into consideration when calculating a comfortable mortgage payment, but the 28% rule will give you a good starting point so you can begin looking for properties.
Consider the Costs of Home Ownership
Many first-time homeowners are blindsided by the varied and recurring costs of homeownership — don’t be one of them. In addition to your monthly mortgage payment, you need to consider other expenses like HOA dues, property taxes, insurance, regular maintenance, repairs, and more! These expenses can stack up quickly and they vary depending on the size and features of the property you decide to buy, so it’s essential that you factor them in when budgeting for your first home.
Choose an Affordable Property
There’s the 28% rule, and then there’s the golden rule of homebuying: don’t purchase more than you can afford. After you’ve calculated the monthly mortgage payment you can afford and factored the other recurring costs of home ownership into your budget, it’s time to find some properties that are within your price range. Carry out detailed research to find a few homes that you can comfortably afford, and always remember that this is only the first home you are trying to buy. Few people buy their dream home right away, and it’s far better to choose a property you can afford so you can sell it and upgrade to a new home once it’s financially feasible.
Leverage Down Payment Assistance Programs (DPAP)
It can be hard to save up enough money for a down payment on a home, but there are agencies that can assist you with it. Down Payment Assistance Programs (DPAP) help first-time homeowners come up with the funds they need for the minimum down payment costs on a home, and they are available in a variety of formats. At My Home Mortgage, our team can walk you through all of your options and connect you with the best DPAP for your financial situation. Ask about our state specific programs in Maryland, Virginia, and Washington DC, and schedule an appointment to become pre-qualified for first time homeowners loans.
Proper budgeting is the best way to prepare yourself for the financial responsibilities of homeownership. My Home Mortgage is dedicated to helping first time homebuyers finance their homes with ease. Get in touch with us today to take the first step towards owning your own home!
Testimonials
Patient & Helpful
Tammi was very patient and very helpful throughout the entire application process. Being a first-time home buyer I didn't know a lot of this which made me frustrated but I was able to get approved and now I am a homeowner thanks to Tammi!
— James C.
No Pressure or Stress!
Tammi Lewis made my home buying experience very easy. I felt no stress or pressure. Tammi was with me every step and made sure I understood everything with detailed talks. My credit score was low and Tammi advised me how to raise it. So that the Loan process would be approved with no problems. Any one know that wants to buy their first home I am recommending Tammi Lewis and First Home Mortgage.
— Charlie F.
Professional & Timely
Rob made sure my experience as a first time home buyer was smooth and painless. Very professional and got things done in a timely manner. Could not have asked for more!
— Samantha J.
Great Experience for a New Homeowner
Rob was at all times, willing to go over the numerous pages of information with me. I am a new homeowner and had many as this was my first time navigating the home-buying waters. He explained things to me in a way that I understood and got me all of my documents in a timely and efficient manner. I enjoyed working with him and would refer him to anyone who is looking.
— Erica F.