For many families, there are very few things as exciting as buying a new home.
It is also likely to be the most expensive purchase you will ever make. The average American spent nearly $17,000 on housing costs in 2012, making housing the highest single cost for people around the nation, according to the Bureau of Labor Statistics. That's more money than the second and third highest cost categories - food and transportation - combined.
But if you've started looking for a house, chances are you know what you're getting into. One of the most important factors that people overlook - or choose to avoid - when buying a home is what they can afford.
According to Freddie Mac, a good rule of thumb is to multiply your yearly household income by 2.5 times, which will give you a guess on just how expensive a home you should be looking at.
So if you and your spouse make a combined $100,000 annually, a home in the $250,000 price range is where you should be looking.
A good guideline is the rule of 28 percent. A homeowner should aim for a monthly housing expense at or below 28 percent of their gross monthly income.
Here are a few other tips to remember when buying a home and agreeing on a mortgage:
This icon indicates a link to third-party content. By clicking on the link, you will leave our website and enter a site not owned by the bank. The site you will enter may be less secure and may have a privacy statement that differs from the bank. The products and services offered on this third-party website are not provided or guaranteed by the bank.