But as a reference, we recommend saving between 10 and 20% of the total price of the house. If you save a 20% down payment, you'll avoid paying for private mortgage insurance (PMI), a type of insurance that protects your lender (not you) from losing money if you can't make your mortgage payments. There are several ways to buy a home, but most people pay the full amount in cash or apply for a home loan. If you're still not sure how much you can spend on buying a home, consider the general 30% rule.
It states that your mortgage should not exceed 30% of your monthly gross income, plus or minus 2%. When using the 30% rule to determine housing affordability, you should also consider your other debts. Instead, prospective homeowners need to make sure they can afford the home they are buying and still meet their other monthly obligations. A higher score may mean having to pay a lower interest rate, which means you could buy more houses for your money.
One of the biggest surprises homebuyers face when looking for a home is how much it costs to buy a home.