How Much Home Can You Afford? A Guide for First-Time Buyers Buying your first home is exciting—but figuring out what you can actually afford can feel overwhelming. Whether you're a military family

Buying your first home is exciting—but figuring out what you can actually afford can feel overwhelming. Whether you're a military family preparing for a PCS move, a renter ready to become a homeowner, or a first-time buyer starting your journey, understanding your budget is the crucial first step.

Let’s break it down so you can shop with confidence and avoid costly surprises.

💡 Why It’s Important to Know Your Budget First

Before you start scrolling through listings or touring homes, you need a clear picture of what you can realistically afford. Many buyers fall in love with homes that are out of reach, which can lead to disappointment—or worse, financial stress.

Knowing your numbers means:

• You save time by looking at the right homes.

• You avoid getting into a mortgage you can’t comfortably manage.

• You’re ready to act quickly in today’s competitive market.

📊 What Lenders Look At to Determine Your Budget

Lenders will look at several factors to decide how much they’re willing to loan you:

1. Your Income

Lenders want to see stable, verifiable income. This includes salary, military pay, housing allowances (BAH), bonuses, and even disability income in some cases.

2. Your Debt-to-Income Ratio (DTI)

Your DTI ratio is the percentage of your monthly income that goes toward paying debts—like credit cards, car loans, and student loans. For most loans, a DTI under 43% is ideal, but VA loans may allow for a bit more flexibility.

✅ Tip: VA loans do not require a down payment and are more lenient with DTI, making them a powerful tool for military families.

3. Your Credit Score

Most lenders prefer a credit score of 620 or higher. A better score can mean a lower interest rate, which makes your monthly payment more affordable.

4. Your Down Payment

While conventional loans may require 3-5% down, VA loans let you buy with 0% down—a huge advantage for eligible service members and veterans.

🧮 A Simple Formula to Estimate Affordability

A general rule of thumb is to spend no more than 28-30% of your gross monthly income on housing costs (mortgage, taxes, insurance, HOA fees).

Here’s a rough guide:

* Based on typical loan terms and market conditions in Texas.

📌 Note: This is just an estimate. Your affordability depends on the interest rate, taxes, insurance, and other local costs.

💼 What About Closing Costs and Other Expenses?

Don’t forget the extras:

• Closing costs: Usually 2–5% of the purchase price.

• Moving expenses: Especially important for PCS moves.

• Home maintenance: Set aside 1–2% of the home's value each year.

VA buyers often have lower upfront costs, and some lenders offer closing cost assistance or grants for first-time buyers. Be sure to ask!

🛠 Ready to Calculate YOUR Home Budget?

Here’s what to do next:

1. Check your credit score.

2. Review your monthly income and expenses.

3. Use a home affordability calculator (or ask me—I can walk you through it!).

4. Get pre-approved with a trusted VA or conventional lender.

🎯 Final Thoughts: Don’t Just Buy What You Qualify For—Buy What You’re Comfortable With

Just because a lender approves you for a certain amount doesn’t mean you have to spend it all. Your lifestyle, savings goals, and future plans matter too.

As a real estate agent who specializes in first-time buyers, military families, and renters ready to buy, I’m here to help you make smart, confident decisions every step of the way.

📞 Need help figuring out how much home you can afford—or getting pre-approved? Let’s talk! I can connect you with trusted lenders and help you plan the best strategy for your situation.

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