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" You have a clear budget If you don&amp;#039;t budget already, now is a good time to start. When preparing a budget, take three things into consideration: your monthly income (including taxes), your monthly expenses and your spending patterns. Before you can determine how much you can allocate to your mortgage payment, you must first figure out how much discretionary income you have. Living expenses should cost no more than a third of your total income, so adjust your price tag if the homes you are looking at are above that limit. You understand all the costs &amp;quot;Before making an offer, be sure that you&amp;#039;ve budgeted for expenses beyond the purchase price and your anticipated monthly mortgage payments,&amp;quot; says Linda Descano, president and CEO of Citi&amp;#039;s Women &amp;amp;amp; Co. &amp;quot;In addition to closing costs (which can be more than $10,000), you will need to pay for inspections and a number of other miscellaneous costs that add up fast.&amp;quot; Costs to factor into your budget include: \u2022 Down payment \u2022 Monthly mortgage payments \u2022 Taxes \u2022 Closing costs \u2022 Maintenance fees \u2022 HOA fees \u2022 Added commuting costs \u2022 Insurance &amp;quot;If you&amp;#039;re moving into a bigger place, you&amp;#039;ll also want to make sure that you have some additional funds for furnishings\u2014and an emergency fund for any unexpected home repairs you may need to make within the first year,&amp;quot; Descano says. &amp;quot;It&amp;#039;s a lot to track, so consider downloading your bank&amp;#039;s mobile app or use an online budgeting tool to keep tabs on expenses and get a better sense of how much you&amp;#039;ll need to save to cover it all.&amp;quot; You can make a solid down payment Regardless of the market, you should not buy a home unless you are able to make a 20 percent down payment. While it can tempting to purchase a home with a low down payment of 3 percent to 5 percent, you will be placing yourself in a financially risky situation, like many homeowners found themselves in the recent economic recession. By putting a 20 percent down payment on a home, you are protecting yourself from market declines because you will have a higher equity stake. Additionally, you will have lower monthly mortgage rates and will be on a quicker path to outright home ownership, which is essential for retirement planning. You have a steady source of income The most important part of your budget is your income because it determines what you can afford. If you have an unstable income source, plan on going back to school, or will be dropping from two incomes to one, then buying a home might not be the right option for you. Home ownership is supposed to be a way of building equity, not accruing debt. You have an emergency savings fund If your steady income suddenly becomes unsteady due to illness, injury or some other external factor, make sure you have at least 6 months of savings to help get you through the rough patch. Your savings should be able to cover your monthly mortgage payments and necessary expenses, like food and utilities. You have a good credit score This is a biggie. Your credit score is one of the most important factors in determining your interest rate on your mortgage payment. A high credit score means a lower monthly interest rate, which can save you thousands of dollars in the long run. You can get an annual free credit report from the three credit bureaus, Equifax, Experian and TransUnion, by going to a website like FreeCreditReport.com. You&amp;#039;re in it for the long haul Buying a home is expensive. From closing costs, to interest, to the down payment, purchasing a new property takes a lot of cash. If you&amp;#039;re ready to buy a new home, plan to stay in it for at least 3 to 5 years\u2013that&amp;#039;s how long it will take to start getting a return on your investment. Caroline Wright is a regular contributor to the The Manilla Folder and marketing manager at Manilla.com, the free and secure service that lets consumers manage all of their bills and accounts in one place or via the 4+ star consumer-rated mobile apps. Among her many duties, Caroline spearheads Manilla&amp;#039;s video campaigns, which provide relevant financial and lifestyle content to the Manilla community. Caroline is thrilled to share her knowledge of finance, home organization and productivity with Good Housekeeping readers. For more tips, check out Manilla on YouTube.   "^^<http://www.w3.org/2001/XMLSchema#string>
<http://www.womansday.com/life/work-money/tips/a7163/buying-a-house/>