How to Set a Budget for Buying Your First Home

A home is a significant purchase, and affordability varies among buyers. As of mid-2024, the median price for a new home is $412,300. First-time buyers often mistakenly focus solely on lender-approved amounts without accounting for additional costs like insurance, taxes, and maintenance. The 28% rule suggests that mortgage payments should not exceed 28% of gross income. Buyers should also consider down payments, closing costs, and ongoing expenses to avoid being "house rich but cash poor." Careful budgeting is essential for sustainable homeownership.

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