Budgeting 101 10 Ways to Fine Tune Your Personal Budget Before Buying a House Read the Article Open Share Drawer Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on Tumblr (Opens in new window)Click to share on Pinterest (Opens in new window)Click to share on LinkedIn (Opens in new window) Written by Mint Published Aug 25, 2020 - [Updated Jun 1, 2022] 4 min read Advertising Disclosure The views expressed on this blog are those of the bloggers, and not necessarily those of Intuit. Third-party blogger may have received compensation for their time and services. Click here to read full disclosure on third-party bloggers. This blog does not provide legal, financial, accounting or tax advice. The content on this blog is "as is" and carries no warranties. Intuit does not warrant or guarantee the accuracy, reliability, and completeness of the content on this blog. After 20 days, comments are closed on posts. Intuit may, but has no obligation to, monitor comments. Comments that include profanity or abusive language will not be posted. Click here to read full Terms of Service. For most people, buying a house is the largest purchase they will make in their lives- so it goes without saying that this is not an impulse buy but one in which preparation and research is key. Before you even begin considering signing your name on that dotted line, you need to ensure that your personal budget is in check. By fine-tuning your finances and looking at a home purchase as a lifelong investment, you can buy your new home with minimal monetary concerns and a happy outlook for the future. These ten tips will help you get your personal budget in shape, get the best mortgage for your money, and finally buy that new home you have been dreaming of. 1. Figure Out Your Household Income After Tax How much money do you actually have? Check your pay stub or use an online income calculator and find out how much money you are left with each month after taxes. 2. Make a List of All Monthly Household Expenses Next you need to write out all your monthly expenses like bills, utilities, insurance, as well as groceries and any extras such as tuition. The number you have left is your expendable income. Mint.com offers a free online budget plan that organizes your spending and tracks outgoing expenses. A personal budget is the first step towards buying a new home. 3. Know Where to Cut Back Once you have all your expenses down, take a look and see if there are areas that you can improve upon. Maybe you are spending more than you expected going out to eat or paying for a service you no longer use. Make adjustments so that you can put as much money as possible into savings and paying off outstanding credit cards and loans. 4.Pay Off Debt While you can technically buy a house with debt, it is much easier to not only be approved but have a handle on your mortgage payments when you don’t have to worry about outstanding debt. It will also improve your credit score, an important determinant factor when purchasing a home, by minimizing what you owe as much as you can. 5. Save for a Deposit Though the economy looks to be on the up, lenders are still being extra cautious about lending money. Many require at least a 20% deposit- if you are purchasing a home for $150,000 that would mean you need to put down $15,000 up-front. It may seem like a big chunk of change, and it is, but if you focus your personal budget on saving towards that payment it can definitely be done and improve your chances of getting approved. Buy your dream home with financial confidence. 6. Buy Realistically If you buy more house than you can realistically afford, it will eventually catch up with you. Most lenders advise that you can buy a house that is around 2.5 times your annual salary. The total housing cost needs to include not only the mortgage, but also other expenses such as maintenance costs and homeowner association fees. 7. Get Pre-Approved To really put your best foot forward, it is advised to get pre-approved from a lender before you start house hunting. When you are ready to put down an offer, you will be taken more seriously because they know you are already ready to go ahead with the sale. 8. Hire a Home Inspector Hire a home inspector, separate from the appraiser required by the lender, to find any potential problems you may need to deal with in the future. This will also protect you from getting into unforeseen major issues before the property is yours. 9. Check the Market Before You Make an Offer Before you make an offer, check similar homes in the area to make sure you are paying a fair price in the local market. It could be a potential bargaining chip if the property you want is priced higher than other homes in the neighborhood. Make that dream a reality! 10. Buying a house By taking the time to get your finances in order, save for a deposit, and research the market thoroughly- you are ready to buy your new home with confidence. Buying a new home will be an exciting chapter in your life, do it right, and reap the benefits of a secure and happy future. Jessica Galbraith is a full-time writer and author. Previous Post Easy Budget App Functions (4 Things You Didn’t Know a… Next Post 6 Damaging Side Effects of Having a Bad Credit Score Written by Mint Mint is passionate about helping you to achieve financial goals through education and with powerful tools, personalized insights, and much more. 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