Determine your Budget – Start Today!

Determine Your Home Buying Budget

The best way to start saving for a home is to determine what type of budget range you have available to purchase a house. The best way to do this is to just start shopping around for houses that you might be interested in living in. You can see what the asking price is for houses that you like and this will help you determine how big of a down payment you will need.

A clear budget helps you focus your home search, avoid unnecessary stress, and make confident decisions when the right home comes along.

Start With Price Range - Not Just Listings You Like

Browsing homes online can be helpful, but it shouldn't be your only budgeting tool. Home prices vary widely by location, property type, and condition, especially in Maine and New Hampshire markets.

Instead of asking, "What homes do I like?" start by asking:

• What monthly payment fits my lifestyle?
• How much cash do I have available for upfront costs?
• How much flexibility do I want left over each month?

This shift in mindset helps prevent buyers from stretching themselves too thin early in the process.

Understanding Down Payments (And Common Misconceptions)

A down payment is simply the amount of money you need to pay upfront in order to secure the amount that you need to borrow. In most cases, you pay for a portion of the house upfront (the down payment), and the rest is secured through a loan (that you will repay in monthly payments, called a mortgage). Most mortgages last for 30 years.

National housing data has historically shown that many buyers put down far less than 20%, with first-time homebuyers often putting down single-digit percentages. While averages can vary by year and market, down payment requirements ultimately depend on your loan program, credit profile, and financial goals.

Sources such as ValuePenguin and The Mortgage Reports offer helpful national insights into how down payments have trended over time.

Rather than relying on national averages or outdated rules of thumb, it's better to understand what your options may look like based on:

• Credit history
• Income and employment
• Loan type
• Long-term financial goals

Don’t Forget the Full Monthly Picture

Your home budget is more than just the mortgage payment. A realistic budget should account for:

• Principal and interest
• Property taxes
• Homeowners insurance
• HOA fees (if applicable)
• Utilities and maintenance

Focusing only on purchase price can lead to surprises later. A lender can help you estimate these costs so you're looking at homes with clarity.

How Budget Awareness Strengthens Your Home Search

Understanding your budget early allows you to:

• Narrow your search to realistic price points
• Avoid disappointment or rushed decisions
• Move quickly and confidently when you're ready to make an offer

In competitive markets, prepared buyers often have an advantage simply because they know their numbers and can act decisively.

Ways to Increase Your Buying Power (Without Sacrificing Everything)

By simply shopping around for houses that you are interested in and doing these simple calculations, it's a good way to see if you're being realistic with yourself. If the down payment that you need is way out of range, then you know you either need to make some lifestyle changes to help you save or start looking for houses in a different area.

Want to increase your budget? What are you living with today that you could possibly cut out to save a few dollars? That extra cable package? Do you REALLY need those extra sports channels? Unlimited data on your cell phone when you are always on WiFi? Do you shut the lights off when you leave a room? How high do you keep the heat in your current place? 72 degrees? Do you think you could manage at 68 degrees? Little simple changes like these could save you hundreds of dollars a month, which in turn could increase your down payment budget thousands of dollars. Always live within your means. You’ll be surprised at how much you can save.

The goal isn't to live uncomfortably, but to be intentional. Staying within your means today helps set you up for a more sustainable and enjoyable homeownership experience tomorrow.

Your Next Step: Get Personalized Guidance

Online research is a great starting point, but every buyer's situation is different. Working with a local lender early in the process can help you:

• Understand realistic price ranges
• Explore down payment options
• Align your budget with your long-term goals

For a clear overview of the full homebuying process, start with our First-Time Homebuyer Guide for Maine & New Hampshire or reach out to Acadia Lending Group to learn what you may qualify for.