Variables affecting how much you need to save for a home include your income, debt-to-income ratio, home price, appraisal, inspection, and closing costs.
To stay within your means, spend no more than 30% of your household income on your mortgage (principal, interest, taxes, and insurance). Secure the best terms by maintaining high credit scores, providing a 20% down payment, and having cash for a good faith deposit, inspections, and closing costs.
With a gross annual income of $100,000 ($8,333/month), your mortgage payment should be $2,333 or less, and total debt payments no more than $667/month. Together, mortgage and debt payments should not exceed 36% of your gross monthly income, or $3,000, allowing you to buy a $400,000 home.
Consider these calculations:
Down payment: $80,000 (20%) or $12,000 (3%)
PMI: 0.22% to 2.25% of the loan balance
How to navigate the homebuying process.
Out-of-pocket: Earnest money (1%), appraisal $200-$600, inspection $300-$450, closing costs 2%-5% of purchase price, moving costs $1,250 (local) or $4,890 (long distance), home insurance $2,601
Reduce costs by buying a less expensive home, getting a no-closing-cost mortgage, and applying for down payment assistance.