Buying a house is one of the most important decisions you will make. However, it requires a significant long-term financial commitment, so you need to know what you can afford to pay before you take out a mortgage. Dennis P. Faller, Attorney, in Wapakoneta, OH, has helped many clients complete property transactions and understands what’s at stake. This real estate attorney offers advice to help you budget for a home purchase.

To begin, determine how much money you make each month. Include everything from regular paychecks to fees you receive for freelance work to obtain a complete overview of your income. You need accurate information to come up with an affordable figure for your home purchase.

List all your monthly expenses, such as vehicle payments, insurance premiums, and utility bills as well as expenses for medical care, food, clothing, and gasoline. You also should factor in the costs of nonessentials you don’t want to give up, such as recreational activities and charitable gifts, along with personal spending money. Think of everything you pay for over the course of a month and subtract it from your income to see how much money you have left for house payments.

If your monthly income is $4,000 and your expenses total $2,500, you have a difference of $1,500. However, you shouldn’t spend more than 25% of your take-home pay on a mortgage, so that leaves you with $1,000 for a housing payment. This will leave you with $500 for expenses associated with owning a home, such as insurance and maintenance.

If you save money for a down payment, you can reduce your mortgage costs or increase your price range for a house to buy. Real estate attorneys and other experts recommend homebuyers pay 10%–20% up front, if possible, but even a minimal down payment can provide significant savings.

When you have figured out a budget and are ready to buy a house, have a real estate attorney go through the paperwork to ensure everything is in order. Dennis P. Faller, Attorney, in Wapakoneta, OH, provides excellent advice on real estate transactions and title insurance as well as estate planning and family law. Contact the firm online or call (419) 738-4578 to schedule a consultation. Like them on Facebook and follow them on Twitter for more legal tips from their team.