First-time homebuyer: Setting a budget

It’s a scary time to be thinking about buying a home. However, there’s opportunity to be had for the right buyers, even during these tough times. I recently became a first-time homebuyer when I purchased my condo in October 2011. It was a thrilling, bumpy road, and I’m eager to share my experiences and knowledge with you in this blog series. I’ll cover a lot of topics from saving for a down payment, to dealing with unexpected surprises after you move in (hint: the previous owners left three cats). Today I want to take a look at special considerations first-time homebuyers may not think about when planning their budget.

Knowing your price range before you start shopping will save you a lot of time, stress, and help you find your perfect home. Before you start hitting open houses and scheduling visits with your real estate agent, take a look at your finances and ask yourself some tough questions.

There are lots of calculators and tools online to help you determine how much of a mortgage you can afford, including one from Bankrate.com which allows you to plug in both income and debt numbers. For all of these calculators you’ll need to know your down payment, income, mortgage interest rate and property tax. Mortgage brokers can also help you figure out how much mortgage you can afford, and what kind of mortgage a lender is willing to give you.

Being a first-time homebuyer is an exciting experience, and it’s easy to get swept up in the thrill of buying your own home. That home isn’t going anywhere. Take your time, do your research and ask questions. As a first-time homebuyer, you may not know the right questions to ask. Build a team with an experienced real estate agent, a mortgage broker and real estate lawyer. Your experts should walk you through every step of the process to your first home. Good luck.