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Doing A Budget To Buy A Home Is Important

By
Real Estate Sales Representative with Keller Williams 302218

Doing A Budget To Buy A Home Is Important

Anyone looking to buy a home no matter where you live, it is extremely imperative to make a budget. You are probably wondering why making a budget is a must. It is simple. A budget will assist you, giving you a financial layout so you know just how much you can afford to spend on a new home and how much of a monthly payment you can afford.

However, before you spend the time to do a budget, even though a budget doesn't take that long, you need to make sure it's a place your going to stay at for at least 2 or 3 years. If you can't see yourself staying put at least that long, then you need to stop looking to buy. It would not be worth your time buying a home that you have no interest in keeping or staying in for at least that long.

Your budget plays a very important role when it comes to buying a home and how your going to move on. There are two parts to your budget, your monthly income and your monthly expenses. Figuring your monthly income is easy if you get a paycheck on a steady basis, however if you are self employed it can be more difficult to figure and take more time to figure out.

Always write down all your information as you go, you don't want to mess up on figuring it out because you could end up putting yourself in a really bad position, that will be hard to recover from. Once you know your monthly income, you can now move on to your expenses. Your expenses must include everything from rental payment, utilities all the to groceries and money for fun activities. Once that is completed, you can decrease from your monthly budget and see what you have left.

By looking at your budget you can determine how much of a house payment you can afford. Just make you take what your paying for rent and include that in the amount you have left from your budget, this will give you the amount you can afford for a house payment. If your buying a house you won't have a rent payment there for that amount is not going to be in your monthly expenses, so it is important to include that in your end amount.

As you can see having a budget to buy a new home is important. Of course you can probably get away without doing one but it is a risk. This will be a huge investment, a long term one at that, so this shouldn't be a risk your willing to take. It doesn't take long to figure out a budget, sit down and take the time to do one and proceed from there.


Brande Bradford
Bradford Realty Group

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Comments(6)

michelangelo vasco
mvp realty inc. - Manhattan, NY

Once you see your budget on paper not only will it help to see what you can afford to buy but also give you a better idea of where your money is going and where you are wasting money and can cut back

Sep 02, 2009 07:22 AM
John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

Brande - Great advice, especially for first-time buyers.  And home ownership costs more than just the payment.  There will be taxes, insurance, and often expenses for new appliances and furniture that eager buyers overlook.  

Sep 02, 2009 07:25 AM
Kate Elim
Dockside Realty - Spotsylvania, VA
Realtor 540-226-1964, Selling Homes & Land a

Hi Brande...I'm almost wondering if folks should plan on staying longer than 2 or 3 years considering that most areas are just beginning to see prices stabilize.  It may take longer to see enough appreciation to cover closing costs if they decided to sell.

I always suggest people spend less than they are told they can afford simply because there are always things that come up that require money we weren't expecting to spend.

Buyers would do well to read your blog and take your advice.

Kate

Sep 02, 2009 03:36 PM
Brande Bradford
Keller Williams - McDonough, GA
Realtor

Michelangelo, you are absolutely right. Doing a budget always helps.

John, thank you very much.

Kate, thank you. It is important that a budget is done, and your right, you never know what other things are going to come up, because they always do!

Sep 03, 2009 10:02 AM
Brian Griffis
Realty Choice - Springfield, MO

Budgets are useless unless people know where their money is actually going.  I have counseled plenty of people who have budgets, but are broke before the next check comes because there are so many holes in their budgets.  I try to tell them they have to keep track of all their spending, not just budgeted items, but it seems to be hard for people to do.  It usually is the little things, a pack of gum and a lottery ticket here, and a coffee and donut there that often do people in. 

Sep 05, 2009 04:10 AM
Alison Hunter
Bradford Realty Group - Barnesville, GA

Brande - great blog! I know buyers will sometimes depend upon the lender to do all the math. NOT SO SMART!! They will let you get too far over your head sometimes!!

 

Feb 16, 2010 11:46 AM