Adelina's advice is great, Dh and I did basically everything she said.
Definitely first look at your joint bills, debts, and monthly expenses and leave wiggle room for the emergencies that are bound to pop up.
What I would like to add though to Adelina's advice is I would strongly recommend NOT going to the high range of waht the banks or the lenders SAY you can afford.
You can go to a bank and they will sit with you and give you a range. For example, they will say you would be okay getting a house that is up to 450,000. However, from our experience, they really try to extend you to the absolute thinnest you could go. DH and I knew what we'd like to spend on a mortgage every month and had a figure we were comfortable with. However, the lenders were kind of trying to sway us from going even up to 80,000 more! I'm glad we didn't listen to them and didn't torture ourselves with looking at houses out of our range. I have no idea how we would afford any more than we already pay without drastically cutting out basically everything like vacations, eating out, etc. things we enjoy!
The plus side to home ownership is you do get quite a bit of money back during tax season
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that is a huge help with the unexpected costs that always pops up.
as far as PMI goes:
What Is PMI?
PMI is extra insurance that lenders require from most homebuyers who obtain loans that are more than 80 percent of their new home's value. In other words, buyers with less than a 20 percent down payment are normally required to pay PMI.
Benefits of PMI
PMI plays an important role in the mortgage industry by protecting a lender against loss if a borrower defaults on a loan and by enabling borrowers with less cash to have greater access to homeownership. With this type of insurance, it is possible for you to buy a home with as little as a 3 percent to 5 percent down payment. This means that you can buy a home sooner without waiting years to accumulate a large down payment.
The downside of it is of course you are adding yet ANOTHER bill every month in addition to your mortgage. I forget how much it would've been for DH and I but I think it was around 300? If you can, I would really try to put %20 down. Not only to avoid PMI but it also gives you leverage with the sellers to talk them down in price since you come off as a more serious and responsible buyer who will basically cause less issues with the lenders/banks who might reject a couple who is not as financially stable.
Ahhh, there is so much info, like adelina said, first step is taking a long hard look at your bills, debts, income etc and give yourself ROOOM for emergencies and life situations.
Then I would go into a bank one saturday with DH and just sit with a lender and see how much they think you could undertake.
Then look at houses online and in areas you'd like in those price ranges. See what you like but be practical. Then you'll have an idea how much you'd have to save to get %20.
After that, save, save, save. It really helped making a goal. Good luck!
