First Time Home Buyers: How Much Home Can You Really Afford? | Michael McVinney
Buying a home can be very stressful & confusing, especially for first time home buyers. This article will you figure out what you can afford when buying a home.
First Time Home Buyer, home affordability, how much does a house cost, mortgage calculator
post-template-default,single,single-post,postid-25828,single-format-standard,bridge-core-1.0.6,ajax_fade,page_not_loaded,,qode-title-hidden,side_area_uncovered_from_content,qode-child-theme-ver-1.0.0,qode-theme-ver-18.2,qode-theme-bridge,qode_header_in_grid,wpb-js-composer js-comp-ver-6.6.0,vc_responsive

First Time Home Buyers: How Much Home Can You Really Afford?

First Time Home Buyer - How much can I afford?

Photo by Karolina Grabowska from Pexels

First Time Home Buyers: How Much Home Can You Really Afford?


The decision to become a first time homeowner is not one that’s arrived at lightly. The main reason is that buying your first home likely will be the largest purchase you’ll make in your life to date.

How much you’ll spend on a home can largely depend on what you can afford, and that’s one of the first things new homebuyers must figure out. Mortgage lenders provide online calculators to help you understand how much you can afford, but their criteria are strictly by-the-numbers. They use ratios for living expenses and your debt obligations relative to your income to determine only their risk of extending a loan to you.

But your financial situation is your own. Only you know how much you can afford to pay each month toward living expenses and still be comfortable. Keep in mind that owning a home comes with expenses that lie beyond just the monthly house payment. If you’re a first time buyer, how much home can you really afford?

How much do you have for a down payment?

There are first time homebuyer programs for loans with low down payments, sometimes as little as 3 percent of the purchase price. To get the super-low mortgage interest rates you might see advertised, however, a lender will may want 20 percent down.

Putting a full 20 percent down also gives a homebuyer enough immediate equity to avoid paying private mortgage insurance (PMI), which can add hundreds of dollars a month to your house payment. Between a better rate and avoiding PMI, a larger down payment can help you qualify for a more expensive home. But qualifying isn’t always the same as being able to afford it.

What additional costs are on the horizon?

A house payment is only one expense associated with homeownership. Owning a home means there will be property taxes, insurance, maintenance, repairs, and furnishing costs as well. If you use all your savings on a down payment, will you be too cash-poor to afford those other expenses?

One way to mitigate the stress of unexpected expenses that can crop up is to set aside some money each month in savings. Putting $100 a month or so into a reserve, however, means your actual living expenses are more than just your mortgage payment.

Keep in mind, too, that property taxes and homeowner’s insurance are far more likely to rise in cost as time goes on than they are to fall. Also, compare the current tax assessment to your purchase price because there is a chance that the property will be reassessed based upon the purchase price of the home. You might also consider your family situation. Is your household growing in number? How will that affect your monthly budget?

What doesn’t your lender know?

When a mortgage lender runs the numbers to determine what payment amount you qualify for, they’re looking at your ongoing obligations – car payments, student loan payments, and your minimum credit card or personal-loan payments. If you go out for a $100 dinner every Saturday night, it’s unlikely they’re taking that into account when they tell you how much home you can afford.

It’s wise to ask yourself, then, if you can afford a house payment and still do that weekly dinner. If not, how easily can you give that indulgence up? What about your monthly gym membership, trips to the salon, or subscription meal service?

There are plenty of first-time homebuyers who tell themselves they can cut back on their lifestyle in order to afford to buy a home, then discover some things aren’t so easy to just give up. Your mortgage lender is unlikely to warn you about that. It’s up to you.

Can a Realtor Help you?

The answer is yes!  A good Realtor can help you during every step of the home buying process.  Remember a real estate agent does is immersed in the process every single day.

The bottom line

Homeownership is a major expense, and it goes beyond just what your monthly house payment is. A lender will tell you what they think you can afford, house payment-wise, but there are other costs to consider when it comes to how much home you can really afford. Often, some of the questions about true affordability can be answered only by you.

If you are considering buying a house, you may want to read “10 Steps To Buying a House For The First Time Home Buyer” or “Buying a Home- Everything is Negotiable.”  For those that are considering selling a home check out “First Time Home Sellers – 5 Real Estate Tips”


Please feel free to search all available real estate here.  Or, call, text, email me with any questions or to setup a free consultation.


Chautauqua Real Estate Broker - Western New York - Michael McVinney - Real Estate For Sale

Chautauqua Real Estate Broker – Western New York – Michael McVinney – Real Estate For Sale

Michael McVinney

Realtor | Real Estate Broker | CRE Team Leader

ERA Team VP | MLMcVinney & Associates, LLC


To see what clients think about me, check out my 5 star google reviews!



Chautauqua Real Estate For Sale


This home is completely surrounded by trees and wildlife, and is located over 20
Landquest Inc.

Looking for luxurious and peaceful living with the convenience of being close to
Howard Hanna Holt – Mayville

1994 Ranch home with 3 BR, 2.5 BA, attached double garage, lovely family room/ga
ERA Team VP Real Estate