Buying a home is one of the most important investments you will make throughout your life. If you intend to look for a new home or second residence in the coming months, it is essential that you first do some accounting and establish a budget.
When making these accounts, you must assess aspects that go far beyond the property price. And, most importantly, you have to be realistic with your possibilities. What influences when preparing a budget to buy a home?
Four key factors to make your budget to buy a home
1. Net annual income
Any calculation to design a budget for acquiring a property must start from this concept. Sum up all the family income and deduct all the costs, fixed and variable.
The result is a net income that will give you an idea of your financial state and your ability to save, very important if you are thinking of buying a home. That income can also put you on track with the type of home you can afford, so it will be easier to focus your search on a specific area or particular characteristics.
2. Available savings
Beyond the property price, purchasing a home entails some initial expenses that must be faced: notary, property registry and taxes. These expenses can be around 10-15% of the home's value. Besides, banks only usually grant loans for 80% of the property value.
It means that it is necessary to have certain solvency for facing those first payments. A good decision is to set a savings goal focused on buying a home in advance, considering those net incomes. That's how, when the time to sign the deeds come, you will have enough savings for the initial expenses and even to reduce the mortgage.
3. Debt capacity
It is a fundamental aspect that depends directly on the income you have. Ideally, your monthly mortgage payment should not exceed 30 - 35% of the net income.
That way, you'll not have difficulties in facing it. We also recommend spending some time negotiating with banks to find a home loan with the best possible conditions.
4. The essential balance in the budget to buy a house
Net income, savings and debt capacity will be the basis for calculating that budget to buy a house. It's essential to focus on what you can afford to not mortgage your future beyond what's reasonable.
That balance between reality and wishes sometimes seems complicated, but it doesn't have to be. It requires patience and determination to get some extra savings or a good opportunity. And it is also possible to have it with some flexibility when choosing the area or characteristics of the home.
You're the only one who can calculate your budget to buy a home. However, Spainhouses.net helps you make your dreams come true by providing you with the best real estate offer. Start looking for your ideal home now.