Begin your budget by figuring out how much you (and your partner or co-buyer, if applicable) earn each month. Include all revenue streams, from alimony and investment profits to rental earnings.
Next, list your estimated housing costs and your total down payment. Include annual property tax, homeowner’s insurance costs, estimated mortgage interest rate and the loan terms (or how long you want to pay off your mortgage). The popular choice is 30 years, but some people opt for shorter loan terms.
Lastly, tally up your expenses. This is all the money that goes out on a monthly basis. Be accurate about how much you spend because this is a big factor in how much you can reasonably afford to spend on a house.
Input these numbers into our Home Affordability Calculator to get a clear idea of your homebuying budget.