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When you are house hunting, how do you know what homes are in your price range? It’s one of the many questions to wrestle with when you’re in the market to buy a home. Knowing what your price range is as you begin the homebuying process can help focus your search and provide a better sense of where you stand in the housing market. Here are some good things to consider as you begin your house-hunting adventures.

Evaluate Your Budget

Before you start house hunting, take some time to evaluate your budget. After all, it doesn’t matter if you love a house or neighborhood if you can’t afford it. As a general rule, your mortgage payment should not exceed 28% of your monthly take-home pay. So, for every $1,000 of net income, add $280 to your max mortgage budget. Buyers who are debt-free have more wiggle room than buyers who have more bills to pay. Also consider if a bigger home will increase your electric bill, if a hot tub will increase your water bill or house maintenance costs, and if a larger yard might require costly yard maintenance.

Consider Your Debt

If you have debt, such as credit card or student loan payments, you want to be sure you can handle a mortgage and other bills on top of your monthly minimums. Follow the 43% debt-to-income ratio rule—meaning that your monthly mortgage payment, car loans, credit card bills, and utilities should not exceed 43% of your gross annual income.

Calculate Your Down Payment

How much do you have available for a down payment? It can make a big difference in your monthly mortgage payment. The more money you put down, the lower your monthly payments will be. Use our Mortgage Payment Calculator to get a better sense of how much money you’ll need to save for your down payment.

Research Ways to Save

We’re committed to helping members make smart financial decisions—which is why we offer free access to HomeAdvantage®. Not only can you use this program to search for homes and find an agent online, if you work with one of the approved agents you can qualify for HomeAdvantage Cash Rewards* equal to 20% of the agent’s commission. And you can earn even more Cash Rewards if you both sell and buy your home through HomeAdvantage.

Learn More About HomeAdvantage

Want to Learn More?

If you have any questions or would like to get more information from a Salal Home Lending expert, feel free to reach out.

All Salal loans are subject to credit approval. Property must be located within CA, ID, NV, OR, UT, or WA. Some restrictions may apply.

*The HomeAdvantage program is made available to members through a relationship between Salal Credit Union and HomeAdvantage. Cash Rewards are awarded through the HomeAdvantage program to buyers and sellers who select and use a real estate agent in the HomeAdvantage network. Home buyers or sellers are not eligible for Cash Rewards if they use an agent outside this network. Cash Rewards amounts are dependent on the commissions paid to the HomeAdvantage network agent. Obtaining a mortgage or use of any specific lending institution is not a requirement to earn Cash Rewards. If you are obtaining a mortgage, Salal Credit Union may have specific rules on how Cash Rewards can be paid out. Cash Rewards are available in most states; however, are void where prohibited by law or by Salal Credit Union. Please consult with your Salal Credit Union Mortgage Advisor for details that may affect you.