Buying a home is one of the biggest financial decisions you’ll ever make, and knowing your budget is the first and most important step before you start house hunting. The last thing you want is to fall in love with a place—only to realize it’s out of reach.
So, how do you determine how much home you can actually afford? Let’s break it down.
The 3X-5X Rule: A Quick Estimate
A simple rule of thumb is that your home price should be 3-5 times your annual income (if you’re putting down 20%).
- If you earn $100,000/year, you should look at homes between $300,000 - $500,000.
- If you earn $200,000/year, your price range is $600,000 - $1M.
But wait—there’s more to it than just income!
The Hidden Costs of Homeownership
Most buyers focus on the listing price, but the real cost of homeownership includes much more:
Closing Costs: Expect to pay 2-5% of the home price upfront for lender fees, appraisal, title insurance, and more.
Property Taxes & Insurance: These vary by neighborhood and property type, so make sure to budget accordingly.
Repairs & Maintenance: Even a brand-new home will have upkeep costs—always set aside funds for unexpected expenses.
HOA Fees (if applicable): Buying a condo or co-op? Be prepared for monthly fees that can impact affordability.
Want a deeper dive into these costs? 🎥 Watch my latest video here: https://youtu.be/n2QopeCM-NQ
🔑 Why Pre-Approval is a MUST in Today’s Market
One of the best ways to avoid surprises and be taken seriously as a buyer is to get pre-approved for a mortgage.
Here’s why it matters:
✔️ It tells you exactly what price range you should be shopping in.
✔️ It proves to sellers that you’re a serious buyer (a huge advantage in a bidding war).
✔️ It speeds up the closing process since lenders have already verified your financials.
According to The Wall Street Journal, more sellers today prefer pre-approved buyers because it lowers the risk of deals falling through.
Thinking about buying in the next 6 months? Get pre-approved NOW so you’re ready when the right home hits the market!
Free Buyer’s Guide – Get Yours Now!
Buying a home is a big deal, but with the right preparation, you can make smart, confident decisions.
To help you, I’ve created a FREE Buyer’s Guide packed with expert tips on budgeting, mortgages, and avoiding common pitfalls.
Download your FREE Buyer’s Guide here: https://shared.xara.com/iQ6fa5LOBD
Have Questions? Let’s Talk!
I’d love to hear from you! Drop a comment below or DM me with your biggest questions about buying a home—I’ll answer them in a future video.
And don’t forget to subscribe to my YouTube channel for more expert real estate tips! 🎥
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