Someday I want to buy a house, but have no idea about budgeting for one?

This is a tough question. When I bought my first house 17 yrs ago, it was very, very tight on my budget. After the mortgage payment, gas and other necessary expenses, there was only about $200 for food for a family of three per month. We prayed hard and budget up every month and what? Three years later we could even buy a brand new SUV. And today after 17 years, with God blessing, I own a 3000 sq. ft house and two rental properties. Unbelievable!!

Income debt ratio to me is a Nah! When you own rental, your ratio is high anyway.

Plan on spending no more than 25% or one fourth of your take home pay on your rent or mortgage payment. Never assume you can pay more than that by cutting corners somewhere else. You are talking about a 15-30 year commitment and at some point, that kind of frugality will prove to be too limiting when the unexpected emergencies come along. Limit yourself to those payments never being more than 1/4 of your take-home pay. Put another 1/4 of your take home pay into a high interest savings account.

It doesn't matter what my house cost nor what I make. What matters is that when you are saving to buy a house, remember that the more you can put toward a down payment on a house, the lower your mortgage payments will be. That should always be your goal..

AND, never, ever consolidate your income with the income of your spouse or live-in friend. Those things can change and you don't want to figure on using both of your incomes to calculate what you can afford to pay. What happens if one of you lose the ability to work or become too ill to work? It will all fall on just one of you. That is how a whole lot of houses end up in foreclosure.

We didn't do the great research you've done, but knew that at the time that the market was on the low side and homes were affordable. We were careful to make sure we didn't get an adjustable loan that could swell our payments beyond what we could afford.

The bottom line is that no one is looking out for you properly except you. We had a great realtor working for us, but I've heard a lot of horror stories there. Ours started us out looking at homes a bit pricier than we felt we could afford. We had to scrap together a down that barely covered it, and the seller had to agree to waive some costs so we could qualify. But in the end we got a great place, and in the last 13 years have had a good life in our home, and made money, even though the bottom pretty much fell out in the southern California market, which was grossly inflated beyond anything our children could ever hope to afford.

You need to make sure you know what you want, then go get it. Is this your "lifetime" home, or something you plan to sell when the market improves? How and where are the schools in your neighborhood, and convenience to freeways, or businesses, or shopping? But don't get yourself into a box and overbuy. If you're young, your future income will likely increase, but you can remodel and make improvements on the home you buy, instead of buying a bigger place right off that's more than you can afford. If you have to scrimp elsewhere to make ends meet, you might not be ready to buy.

A lot of people got themselves into a pickle the last few years. Our neighbors lost their home. My husband lost his job recently, but because I'd gotten a better job after we bought the house, we are able to get by because we've managed our other debts. It's a big step, it's crazy, it's nerve-wracking, but I'd do it all over again because having our own home is so fantastic. A lot of work, but fantastic, because it's ours.

Good luck.

In today's market, things have changed. Right now, if your credit is good, you can pick up a foreclosed house right now for CHEAP! You'll need a 10% down payment and a job, and you're in. If not, save up as much money as you can for a down payment. The old rule of thumb was you could afford a house for 3 1/2 times your yearly income. Condos are a good way to get into the housing market. They are usually much cheaper than a house. So your mortgage is pretty close to what you'd be paying in rent anyway. And you build up some value.

You should only spend 1/3 of your income on a mortgage payment. You may get a loan approval if it is for a bigger percentage but it wouldn't be wise. Look at all the people who were talked into that and are in foreclosure today. One big tip...stick with a fixed rate loan. A loan officer may try and talk you into an adjustable because your payments start lower but then you are screwed when they go up.

it used to be the case that mortgage lenders would lend 3.5 times your annual salary. (doesn't really work like that anymore)

It is wise not to stretch your finances too much on a mortgage, because if interest rates go up, so will your mortgage payments.

you can use mortgage calculators online, if you put in a house price, and an intrest rate (about 3 - 5% at the moment), and term (usually 25 years), then it will tell you your monthly payments.

http://www.moneymadeclear.fsa.gov.uk/tools.aspx?To...

I'm sort of in your position now. Here is my plan, hopefully you'll find it helpful:

1. Determine your time frame on when you want to buy a house

2. Establish/repair your credit history

3. Bring your Credit Score to at least 650 points (the higher the better)

4. Start saving (need at least $10,000 to cover initial costs, not counting downpayment).

5. Contact local HUD and sign-up for the first time home-buyer program.

6. Follow the program

7. Buy your house.

I hope the above helps. if not - contact me directly (use IM)

your mortgage payment should be more than 30% of your gross wages.

25% gives you a nice little cushion.

how old are you