There’s not much question about it; today’s real estate market is a seller’s market. It’s a simple matter of supply and demand. Econ 101 students all learn about supply and demand, and one nearly unwavering aspect of supply and demand is that when supply drops and demand for the remaining goods and/or services remains constant, […]
Preparing for KC Home Loans: Homeownership Budgets
It’s important to prepare yourself for a complete financial overview when applying for KC home loans. Getting your financial house in order is a key part in preparing to get KC home loans. The best way to do this is to put together a homeownership budget.
Creating a Homeownership Budget
A homeownership budget is a mock-up budget that allows you to see if you can afford the increased expenses of purchasing and owning a home. This step will show you where you are spending your money and changes you can make to improve your situation, if necessary. Be sure to include all of the income you make each month and every expense that you incur to ensure your KC home loan budget is accurate.
Calculating Additional Costs
Once you know your expenses outside of your current residence, you will need to make room in your budget for your mortgage payment. However, don’t make the mistake of believing mortgage payments are the only cost of owning a home. Added monthly and yearly costs can include:
- Higher utility bills
- Property taxes
- Household maintenance and repair costs
- Home furnishings and equipment
- Yard and garden supplies
- Remodeling and home improvements
Some expenses are not monthly and will likely occur throughout the year. It’s a good idea to budget a set amount for each additional bill so you have the extra money available. These items should play a role in your homeownership budget and will affect which KC home loans you qualify for.
Tools for Homeownership Budgets
In addition to making a budget, you can also use an affordability calculator to estimate how much home you can afford. For a more exact number, get pre-approved for a home loan by a trustworthy loan officer before you start house hunting.