The dream of being able to paint the walls whichever color I want. Heck, what about the dream of being able to knock over just about any wall I desire!
Hanging up beautiful mirrors without the fear of loosing money from my rental deposit.
The dream of buying our first home is getting a little closer!
Let’s not forget about how we have created, through trial and error, a super successful budget for our family that has helped us get to the point where we are able to start living our dreams!
If you are interested in learning more about how we were able to make all this work on as a one income family, you will want to binge read/watch all our one income family budget updates. That’s where we share all our REAL LIFE NUMBERS!
So now that the table is set…
We are at a point now that we feel we have our ducks in a row and feel very comfortable with taking on the responsibility of a mortgage.
There is one place were I wish we were a little further ahead. I do wish that we had more in savings.
After talking with our lender we realize that we need about $4,000 more dollars for closing costs then we planned for. But I will explain that more in a minute.
It’s official once you talk it out with a lender. I would highly highly HIGHLY recommend sitting down at home and figuring out how much you actually can afford to pay each month for your home.
Those costs will include everything from your mortgage, homeowner insurance, property taxes, and many more expenses. They do vary depending on the area you want to live. So do a simple Google search of “homeowner expenses” in your area.
So after sitting down and figuring this all out, hubby and I decided that our max number for out of pocket each month for home ownership is no more than $1,900 a month.
If you would be interested in learning about the details of how we got to this number, leave me a comment below. If there are enough requests I would be happy to pull together another post all about it!
We met with our lender and figured that within the areas we are looking and with the $1,900 a month budget, our home purchase price should not exceed $300,000.
What loan programs we are looking at…
Our Plan A would be to use the USDA home loan program which would allow us to purchase a home with ZERO DOWN! Pretty sweet!
There are some max income restrictions, nothing we have to worry about, and the area of the home has to qualify as rural. A simple search on their website will let you know if the house location makes the cut.
With this Plan A option, we do need about $9,000 for closing costs, which is about $4,000 more than we were expecting. No big deal! The market is not hot for what we are looking for so we have time.
One last restriction with the USDA loan is that the come needs to be in pretty good condition to move in. No problems like flooring or paint. It needs to be ready to go. Which in our price range, is not the norm.
In an effort to widen the market of homes to choose from, we have a plan to continue aggressively saving so we will have the closing costs but also a 3.5% down payment at the end of this year.
The program we then would hope to use is called the FHA 203k loan. What would be great about this option is that it allows for construction / home improvements. You are able to borrow up to an additional $30,000 to make improvements to the current condition of the home.
So our purchase price would then need to be no higher than $270,000 to keep us under budget with the FHA 203k loan.
So that’s our plan on how to buy a house on a budget!
Thanks for stopping in and I will talk to you soon! Xoxo
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