How to Set a Realistic Budget for Your First Home

1) Pick your monthly comfort number

A “payment-first” approach helps you avoid stretching later. Consider income stability, other goals (retirement, travel), and an emergency buffer.

• List current debts and typical monthly spending.
• Leave room for maintenance, utilities, and life changes.
• Try a range (e.g., “$2,000–$2,300”) rather than one hard number.

2) Translate payment → price range

Work with a lender or calculator to map your target payment to a price, factoring in interest rate, down payment, taxes, insurance, and HOA.

3) Plan total cash needed (and reserves)

• Down payment: 3–20%+ depending on the loan.
• Closing costs: Typically 2–4% of the price.
• Move-in & setup: Appliances, paint, small repairs.
• Reserves: Lenders may require 1–2 months; consider keeping 3–6 months as a safety net.

4) Rates change-build a buffer

Run scenarios: your budget should still work if rates rise a bit before you lock. Discuss points, buydowns, and adjustable options with your lender.

5) Compare agent proposals to save more

Local, licensed agents on Seeking Agents® can compete for your business. Comparing proposals may lower costs or include buyer incentives.