Is It Better to Budget Before Buying a Humble Texas Home?

By Jeri Maito

Are you planning on buying a Humble Texas Home and are looking for home buying tips? If so, you’ve come to the right place!

Yes, it’s true, one of the most important things you can do before buying a home in Texas, or anywhere in the United States, it to budget. Why? The answer to this question is simple. Home buying ALWAYS comes with additional costs that most buyers don’t think about and it’s better to budget for those costs in ADVANCE rather than be taken by surprise and have to pay those costs later.

How to Budget for Buying a House

Don’t have much experience with budgeting? Especially for buying a Humble Texas Home? No problem! Here are a few tips which will make budgeting a lot easier for you.

Step 1: Add Up Your Income

You can’t make a budget if you don’t know how much you can spend. So sit down and add up every source of income you receive each month.

Let’s crunch numbers based on a two-earner household. In our example, John brings home two paychecks a month, while his wife Jane receives one.

John’s Paycheck 1 = $1,600
John’s Paycheck 2 = $1,600
Jane’s Paycheck = $2,800

Total Monthly Income = $6,000

Related: Ready to get your savings rolling? With our free 5-Day Home Buyer Savings Plan, you can learn how to save up $21,000 for your new home in just a year! We’ll give you tips and tricks to save a big down payment fast. Did we mention it was free? Time to turbocharge your savings!

Step 2: List Your Household Expenses

Next, write down every place your dollars go each month.

John and Jane rent a one-bedroom apartment in the heart of town so they can be close to work. A big chunk of their budget goes toward saving for retirement and a down payment on their new home. Here’s how their current budget looks:

John and Jane’s Pre-Home Budget
Charitable Gifts = $600
Savings = $2,200
Rent = $900
Utilities = $300
Food = $400
Clothing = $100
Transportation = $450
Medical = $400
Personal = $450
Recreation = $200

Total Expenses = $6,000

Of course, everybody’s budget is going to be different. We’ve assumed some things in this sample. If some of these categories don’t fit, feel free to make them your own.

Step 3: Calculate Home-Ownership Costs

Now it’s time to figure out how much house you can afford. If you can’t pay cash for your home, Dave Ramsey recommends keeping your mortgage payment—including property taxes and home insurance—to no more than 25% of your monthly take-home pay. You should get a 15-year, fixed rate mortgage.

That means the maximum amount John and Jane should spend on their home payment each month is $1,500. Of course, home ownership isn’t limited to a house note. John and Jane make room for expenses like HOA fees, maintenance and repair, furniture and décor, and lawn care in their budget. They also add extra heft to utilities and transportation since they’ll have more square footage and a longer commute in their new home.

John and Jane’s down-payment goal will be complete when they purchase a home, so they reduce the amount they allot to savings.

John and Jane’s Budget: Changes Made with Home Ownership in Mind
Savings = $2,200 $900
Rent Mortgage = $900 $1,500
Other Housing Expenses = $250
Utilities = $300 $400
Transportation = $450 $550

Total Expenses = $6,000 $5,750

With these adjustments, John and Jane still have money left over—but the budgeting doesn’t stop here.

Read More at: https://www.daveramsey.com/blog/5-steps-to-buying-home-wont-bust-your-budget

Buy A Humble Texas Home

To get started with buying a Humble Texas Home contact me today, Jeri Maito, Realtor® with Red Door Realty & Associates by calling me at (281) 814-5856 or click here to connect with me online.