You have decided the time has come to invest in your own home. Your credit is solid and you have even managed to save up several thousand dollars for a down payment on a home. So, what's next? There are several factors you need to consider before you will know what kind of home you can afford to purchase and that will not be a burden on your pocket-book.

Consider the Asking Price of the Home

Once you have spoken to a financial advisor, you will know how much of a mortgage you will qualify for. You have the decision then to look for a home for the highest dollar amount you can have, or look for more of an in between price that still offers everything you will need in a home. If you could find a nice home with everything you need for only $150,000 but you qualify for a home up to $225,000, would it not be more manageable to buy the cheaper home? Would you be willing to do that?

How Much of a Down Payment do you have?

Another factor to consider is the size of down payment you have. If you choose to purchase a $225,000 home instead of the $150,000 home, your $15,000 down payment will not go as far. Some lenders only require a 5% down payment, especially for first time buyers. Other times you may have to pay as high as 20% depending on your circumstances. The more money you can put down towards your house helps with the interest costs, and overall monthly mortgage you will have to manage.