Relocation and First-Time Buyers
How do I set a budget for my first home?
By Steve Lockhart
The short answer
A first home budget that holds up starts with your actual life, not with a loan formula. Write down your monthly take-home income, your fixed debts, your real spending, and what you want to keep saving.
Full answer
A first home budget that holds up starts with your actual life, not with a loan formula. Write down your monthly take-home income, your fixed debts, your real spending, and what you want to keep saving. The number left over is the monthly payment you can actually carry.
Then remember the payment is more than the mortgage. Add Las Vegas property taxes, homeowners insurance, HOA dues when they apply, utilities that run higher in summer, and a maintenance reserve. The total, not just the principal and interest, is the monthly reality.
Back into the price from the payment you can carry. Your lender's pre-approval sets the outer limit, and usually a comfortable budget sits below it. Buyers who treat the approval as the target feel the stretch within a year; buyers who set their own number feel steady.
Add the cash side: the down payment, the closing costs, and the reserve you keep after closing. The purchase should not empty your savings, because the first year of ownership brings the move, the furniture, and the inevitable small repairs.
Budgeting is not the unglamorous part of buying; it is the part that protects everything else. A home bought within a real budget becomes a foundation. A home bought at the edge of the approval becomes a strain that colors every other decision.
Go a little deeper
Frequently asked
Questions people often follow up on
What percentage of income should go to housing?
A common guideline is around 28 percent of gross income for housing costs, and total debts including housing around 36 to 43 percent depending on the program, but percentages only get you so far. Your real spending and savings goals set the number that works for you.
Should I include maintenance in the budget?
Yes. A planning range of one to two percent of the home's value per year is a common rule of thumb, less for newer homes, more for older ones. Saving it monthly turns a repair from a crisis into a line item.
What if the budget says I can only afford less than I hoped?
That is information, not failure. Adjusting the price range or the timeline is far cheaper than the strain of a stretched purchase. Most first-time buyers start here and move up with their first equity gain.
The Lockhart Method
The Lockhart Method
Your Home | My Strategy | Proven Results
My strategy: set the payment from your cash flow, add the whole ownership picture, and protect the reserve, then let the lender's approval confirm, not set, the range. A budget you control beats an approval that controls you.
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