Budgeting for Your First Home as a Family

Many Americans dream of owning a house one day. So, when the opportunity to get financing for a home arises, it is not uncommon for folks to jump head first without budgeting appropriately. Doing this can be problematic as a slight miscalculation can lead you into a bad financial state in the future.

Buying your first family home requires careful deliberation. It helps if you have a smart financial plan - one that is tailored to your financial situation. Having a budget will help you know how much house you can afford.

Budgeting for Your First Home as a Family

Budgeting involves taking stock of your income and distributing your expenses appropriately to allow you to save, pay up debt, and live a comfortable life. By budgeting ahead of your first home purchase, you will know how much you can comfortably spend on a house in your current financial situation.

Here is what you need to consider when budgeting for your first home.

Your Net Monthly Income

You need to know exactly how much money is available to spend. To do that, first, calculate how much reliable income you make every month. You should not include irregular income such as money from your freelancing side hustle.

After that’s done, take stock of all your expenses. Calculate your fixed and variable expenses separately. Fixed expenses include rent payments, insurance premiums, and car loan repayments. Variable expenses include dining out, hobbies, groceries, and entertainment.

Your net monthly income will be the amount remaining after subtracting your expenses from your reliable income. The net monthly income should now guide how much you should spend on your first home.

Mortgage Deposit

Mortgage lenders require you to put down a mortgage deposit. The minimum deposit amount is usually 10% of the property’s cost. The median home sales price currently is $407,600. Going by this value, you’d need to pay a mortgage deposit of at least $40,760.

To know if the home is affordable, you should be able to raise at least 10% of its value through savings. If you can save above 15%, the better! You will likely get lower mortgage rates when you pay a higher deposit.

However, there are other programs out there, like the Maryland Mortgage Program, to help people buy their first home without requiring a full 10% down payment.

Monthly Mortgage Repayments

Most people base their home purchase decisions on the amount of money they can get from the lender. However, the smart way to go about it is to let your net monthly income guide you. You should budget in such a way that you will be able to pay the monthly mortgage repayments comfortably. 

Other Home-Owning Expenses

The cost of buying a home does not end at the closing price. Besides mortgage repayments, homeowners incur other expenses, and you should also factor them into your budget.

Some of those expenses include:


  • Homeowners insurance

  • Utility bills

  • Renovations

  • Maintenance costs

  • Property taxes

You should also factor closing costs into your budget.

Find an Affordable Mortgage Plan at Equity Mortgage

At Equity Mortgage, we endeavor to offer our customers home loans with the lowest interest rates and closing costs. We have a wide range of loan programs to cater to our customers’ diversified lending needs.  

Contact us via the website or call us directly at 1-800-332-9221 to learn more about our mortgage plans.


* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.