{"id":2116,"date":"2016-05-20T23:36:38","date_gmt":"2016-05-20T23:36:38","guid":{"rendered":"https:\/\/www.movoto.com\/foundation\/?p=2116"},"modified":"2016-05-20T23:36:38","modified_gmt":"2016-05-20T23:36:38","slug":"ultimate-homebuyers-guide-home-buying-budget","status":"publish","type":"post","link":"https:\/\/www.movoto.com\/blog\/ultimate-homebuyers-guide-home-buying-budget\/","title":{"rendered":"Set Your Home Buying Budget"},"content":{"rendered":"<p><a href=\"https:\/\/www.movoto.com\/foundation\/wp-content\/uploads\/2016\/04\/Buying-Budget.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-5131\" src=\"https:\/\/www.movoto.com\/foundation\/wp-content\/uploads\/2016\/04\/Buying-Budget.jpg\" alt=\"Buying-Budget\" width=\"600\" height=\"125\" \/><\/a><\/p>\n<p><a href=\"https:\/\/www.movoto.com\/foundation\/basics\/ultimate-homebuyers-guide-preparation-research\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-4005\" src=\"https:\/\/www.movoto.com\/foundation\/wp-content\/uploads\/2016\/04\/Prep_thumb_2.jpg\" alt=\"Prep_thumb_2\" width=\"300\" height=\"250\" \/><\/a>While it\u2019s tempting to start looking at dream homes right off the bat, you need to paint a realistic picture of what you can afford so you\u2019re not disappointing yourself. You need to determine your home buying budget first.<\/p>\n<h3>Factors That Determine Your Budget<\/h3>\n<ul>\n<li>Income<\/li>\n<li>Credit History<\/li>\n<li>Debts<\/li>\n<li>Expenses<\/li>\n<li>Savings<\/li>\n<li>Loan Term<\/li>\n<li>Insurance Costs<\/li>\n<li>Taxes<\/li>\n<li>Down Payment<\/li>\n<\/ul>\n<p><b>Income<\/b><br \/>\nLenders consider your gross income\u2014all income including salary, rental income, interest, capital gains, etc. before taxes are deducted\u2014when assessing your eligibility. Gross income excludes some government bonds, Social Security benefits, certain gifts, and life insurance.<\/p>\n<p><b>Credit History<\/b><br \/>\nCurrently, the minimum credit score for obtaining a mortgage is 580. There are non-conventional loans that you can get without meeting the credit score minimum. We\u2019ll discuss that more in the Mortgage section.<\/p>\n<p><b>Debts<\/b><br \/>\nYour lender will calculate all monthly payments from debts\u2014student loans, existing mortgages, credit card debt, and car payments\u2014to other installment payments\u2014child support and alimony. If your payments are too high, you may not be approved for a loan.<\/p>\n<p><b>Expenses<\/b><br \/>\nBe realistic about your monthly expenses and deduct them from your income before you can really assess how much you can afford. Groceries, clothing, phone bills, leisure, car insurance, and discretionary expenses are all things to look at.<\/p>\n<p><b>Savings\/Assets<\/b><br \/>\nYour savings can go towards a bigger down payment, which means borrowing less and being more likely to get approved. Calculate how much money you have in savings, your mutual funds, and stocks.<\/p>\n<p><b>Loan Term<\/b><br \/>\nConsider what kind of loan you\u2019re looking for. You\u2019ll end up paying less interest in a 15-year amortized loan, but your payments will be much higher than a 30-year amortized loan. Research the current interest rate and use a mortgage calculator to assess your monthly payments for different loan terms.<\/p>\n<p><b>Insurance Costs<\/b><br \/>\nMany properties require you to pay a year\u2019s worth of insurance upfront. Be sure to factor that into your closing costs.<\/p>\n<p><b>Taxes<\/b><br \/>\nDepending on what state you\u2019re in, transfer taxes cost anywhere between 0 percent to 2 percent.<\/p>\n<p><a href=\"http:\/\/www.ncsl.org\/research\/fiscal-policy\/real-estate-transfer-taxes.aspx\" target=\"_blank\" rel=\"noopener\">Get transfer tax rates by state &gt;&gt;<\/a><\/p>\n<table style=\"width: 100%; border-spacing: 5px;\">\n<tbody>\n<tr>\n<td style=\"width: 50%;\"><a href=\"https:\/\/www.movoto.com\/foundation\/basics\/ultimate-homebuyers-guide-basics-of-buying-a-home\"><span style=\"text-align: left; font-size: 11pt;\">&lt;&lt; PREVIOUS CHAPTER:\u00a0Before You Start: Learn the Basics of Buying a Home<\/span><\/a><\/td>\n<td style=\"width: 50%; text-align: right;\"><a href=\"https:\/\/www.movoto.com\/foundation\/basics\/ultimate-homebuyers-guide-choosing-neighborhood\"><span style=\"text-align: right; font-size: 11pt;\">NEXT CHAPTER: Questions to Ask Yourself When Choosing a Neighborhood\u00a0&gt;&gt;<\/span><\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><a href=\"https:\/\/www.movoto.com\/foundation\/basics\/ultimate-homebuyers-guide\/\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-5426 size-full\" src=\"https:\/\/www.movoto.com\/foundation\/wp-content\/uploads\/2016\/05\/Hombeuyers-Guide_button.jpg\" alt=\"Hombeuyers-Guide_button\" width=\"334\" height=\"48\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>While it\u2019s tempting to start looking at dream homes right off the bat, you need to paint a realistic picture of what you can afford so you\u2019re not disappointing yourself. You need to determine your home buying budget first. Factors That Determine Your Budget Income Credit History Debts Expenses Savings Loan Term Insurance Costs Taxes Down Payment Income Lenders consider your gross income\u2014all income including salary, rental income, interest, capital gains, etc. before taxes are deducted\u2014when assessing your eligibility. Gross income excludes some government bonds, Social Security benefits, certain gifts, and life insurance. Credit History Currently, the minimum credit score [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[167,260],"tags":[],"class_list":["post-2116","post","type-post","status-publish","format-standard","hentry","category-basics","category-buyer","post--single"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Set Your Home Buying Budget<\/title>\n<meta name=\"description\" content=\"Discover what you need to factor in when you&#039;re determining your home buying budget.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.movoto.com\/blog\/ultimate-homebuyers-guide-home-buying-budget\/\" \/>\n<meta property=\"og:locale\" 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