Before you go house shopping or attempt to get pre-approved for a loan, look at your monthly budget and decide how much you can safely spend on your mortgage. Avoid breaking even every month with your incoming and outgoing money.
Many financial experts agree that a home mortgage should not exceed 25% of your monthly take-home pay. While personal finance is unique for each individual, avoid putting yourself in a bad financial position to pay for a home that may be larger than your budget can afford.
As you navigate the home buying process, try different loan terms. For instance, if you can’t afford to put 20% down in cash, be prepared to pay private mortgage insurance (PMI) for the life of the loan (unless you later refinance).