How much you can afford on your next home purchase?

by Bob Hummer 11/05/2024

How much you can afford on your next home purchase featured image

As a homebuyer, there’s often pressure out how much budget to work with to purchase your ideal property. Figuring out how much to spend on a home isn’t just a matter of numbers--it also depends on your lifestyle and long-term goals.  



Mortgage as a percent of your income

Purchasing a home is dependent on numerous factors, including your income, credit score, and the type of lifestyle you’d like to maintain.

One of the best ways to determine how much house you can afford to buy is to figure out what percentage of your monthly income will be going towards your mortgage.

For most homeowners, a mortgage payment taking up no more than 25% of their income is ideal, as it provides wiggle room for other financial investments and responsibilities. So, if you earn $6,000 per month, you may not want your monthly mortgage payment to exceed $1,500.



Plan for homeowner expenses

Before finalizing a home purchase, it’s best to consider future maintenance your property may need. This may include updating the flooring in the kitchen or perhaps repairing an older roof, all of which can become expensive quickly. 

Also consider monthly utility bills such as water, electricity, your internet bill and more when budgeting out for how much home you can afford. 



Create a comprehensive budget

The goal of a great budget is to know where each dollar of your income goes, and to have a plan for each cent that you make. 

Within your budget, it’s essential to account for things such as home and medical emergencies, retirement, savings for vacations and so on.

If you take due diligence, not only will you have a better idea of where your money goes, but you’ll also be confident in knowing exactly how much you can spend on your next home purchase.

About the Author
Author

Bob Hummer

Bob Hummer brings a wealth of experience with him; a practitioner in real estate in Northern Virginia since 1978, a Life Member of both the Million Dollar Sales Club and the Top Producers Club with over 2,500 Satisfied Families and President, Prince William Association of REALTORS in 1991. His experiences range from helping buyers and sellers attain their goals; to renovating historic homes on Capitol Hill; to counseling and assisting homeowners facing the loss of their home due to foreclosure. Since 1996, he has presented his free monthly Home Buyer and Home Seller seminars at the Woodbridge campus of Strayer University. In June 2023 he completed the Certified Probate Real Estate Specialist course and was awarded the designation CPRES. His goal is to assist individuals who inherited real estate and wish to sell. A former "Military Brat" and a retired Air Force Hospital Administrator, Bob has made more than 26 moves during his life and is extremely familiar with all aspects of a family relocating - whether it is across the street or across the nation.