Whether it’s your first home or your second, buying a home is an exciting adventure, and getting lost in the moment can be easy. But take a step back and ask yourself: How much house can I realistically afford?

What is your gross monthly income?home for sale

Your gross income is the income you make each month before taxes, and other deductions are made. Gross income comes not only from your monthly paycheck but other sources of income like:

  • Tips
  • Alimony
  • Pensions

Income like Social Security benefits and the money you received from the sale of a home is excluded from your gross income.

How much is the new house?

When you purchase a house, you’re not only buying the home for how much you negotiate it for. You are also paying for the following:

Some of these factors, like closing costs and down payment, are paid at closing and contain other fees such as:

  • Mortgage application fees
  • Title insurance and title search
  • Recording fees
  • Appraisal fees

You can rest assured that most costs are all paid at once, and your lender will give you the estimate in advance.

What are your monthly expenses?

There are three kinds of monthly expenses, all of which are important in determining how much house you can afford:

  • Fixed expenses that are the same from month to month, like car payments and student loan payments
  • Flexible expenses vary from month to month, like groceries and utility bills
  • Discretionary expenses that you have direct control over, like going out to eat

To calculate your monthly expenses, gather your monthly financial statements and create a list of what you’re paying—remember to include both bills and discretionary expenses. If you’re having trouble keeping track of your monthly expenses, a secure money manager can help.

Consult with a loan officer at

Beginning the steps to purchasing a home? by Guild Mortgage has experienced agents ready to help you begin your journey to homeownership. We will help you review your finances and consult with you about what to expect and how much you can reasonably afford.

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The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.