‘I'm looking at about 120k-140k house budget?’: Unsure of my actual house budget due to lack of personalized advice. How can I determine the right price range to aim for?

Hey Money Minder!

I’m Jake, 27 years old, and I’m thinking about buying a house within the next 6-8 months. I’ve used some online calculators before, but I feel like they’re not giving me a personalized enough estimate. So, I thought I’d reach out to you for some advice. Here’s the lowdown on my situation:

I currently make $45,000 a year.
I have around 22k saved up, with 12k in a high-yield savings account.
I live in Iowa, so it’s a pretty affordable area.
I’ve checked out the First Time Home Buyer programs, and I think I could get around 6-8k in assistance for a down payment.
My credit score is 760.
I have 24k in student loans, with monthly payments of $350.
I contribute 10% to my 401k.
On a monthly basis, I save about $400 and pay $780 in rent.

Do you think with all these factors considered, I could be looking at a house budget of around 120k-140k? I know things can fluctuate, especially with mortgage interest rates, but any guidance you could offer would be awesome!

Thanks a bunch, Money Minder!

Cheers,
Jake

Response from THE MONEY MINDER:

Hello There,

It’s great to hear that you’re considering buying a house in the near future! Based on the information you’ve shared, your current income, savings, and credit score all paint a positive picture for your home-buying journey. Since you’re in a fairly LCOL area and have the potential for assistance through First Time Home Buyer programs, a house budget in the range of $120k-$140k seems like a reasonable estimate.

It’s important to factor in all your expenses, including student loans, 401k contributions, and other monthly expenses, to get a clearer picture of your financial situation. Since mortgage interest rates can fluctuate, it’s a good idea to keep an eye on the market and stay informed about any changes that may affect your home-buying plans.

In terms of a personalized approach, it may be helpful to create a detailed budget that includes all your income and expenses, as well as any additional costs associated with homeownership such as property taxes, insurance, maintenance, etc. This will give you a more accurate understanding of how much you can comfortably afford when it comes to purchasing a home.

All the best from THE MONEY MINDER as you continue your journey towards buying a house. If you have any further questions or need more guidance, feel free to provide more information, and we’ll be happy to help!