You Can Picture the Kitchen. But Do You Know Your Numbers?

You can admire the destination.

You can picture the kitchen.

You can decide which room will become the home office, where the Christmas tree will go, and even where the couch will sit.

But without a financing plan, you’re still standing at the airport without a ticket.

And when it comes to buying a home, knowing your financing plan before you fall in love with the house can make the entire process less stressful—and help you shop with confidence.

Start With the Payment, Not Just the Purchase Price
One of the biggest mistakes homebuyers can make is focusing only on the price of the home.

A $400,000 home might sound affordable based on the purchase price alone, but what really matters is how the total monthly housing payment fits into your life.

Your payment may include:

• Principal and interest
• Property taxes
• Homeowners insurance
• Mortgage insurance, depending on the loan
• HOA dues, if applicable

The goal isn’t simply to find out how much a lender will approve you for. It’s to understand what monthly payment you’re comfortable living with.

Because being approved for a certain amount doesn’t necessarily mean you should spend that much.

Know How Much Cash You’ll Need
Your financing plan should also answer an important question:

How much money will I actually need to bring to closing?

Depending on your loan program and situation, you’ll want to account for things such as:

• Down payment
• Closing costs
• Prepaid taxes and insurance
• Earnest money and due diligence considerations
• Any additional funds needed for the transaction

And just as importantly, you should know how much money you’ll have left after closing.

Buying a home shouldn’t leave you with a beautiful kitchen and a $12 balance in your savings account.

Your emergency fund and financial cushion still matter after you get the keys.

Don’t Let Zillow Decide Your Budget
Online home searches are great for getting ideas. But websites and mortgage calculators don’t know your complete financial picture.

They don’t know about the car payment you have, the income you’re earning, the savings you want to keep, the property taxes in the area you’re considering, or the other financial goals you have.

That’s why it’s helpful to have a real conversation about your numbers before you start seriously shopping.

A good financing plan should help you understand:

What payment makes sense for me?

What price range should I shop in?

How much cash should I plan to have available?

What loan programs might fit my situation?

How much should I keep in savings after closing?

Those answers can give you a much clearer picture of what your home search should look like.

Get Your Game Plan Before You Make an Offer
Getting preapproved isn’t just about having a letter to hand your Realtor.

It’s an opportunity to understand your financing before you’re under contract.

When you know your numbers ahead of time, you can make an offer knowing what the purchase will actually mean for your monthly budget and cash reserves.

It also gives your Realtor a better idea of the homes and price range that make sense for you.

And when you find the house you love, you’re not starting the financing conversation from scratch.

You’re ready.

The Goal Isn’t Just to Buy the House

The goal is to buy the house and still feel financially comfortable afterward.

You should be able to enjoy the new kitchen without constantly worrying about the payment.

You should be able to move in without wondering how you’re going to cover the next unexpected repair.

And you should have a clear understanding of your numbers before you make one of the biggest financial decisions of your life.

So go ahead and picture the kitchen.

Choose the couch.

Imagine the backyard.

Just make sure you have your ticket before you head to the airport.

Your home search should start with a financing plan—not just a Zillow search.