Buying a home is one of the biggest financial commitments you'll ever make. It’s exciting, but it also requires serious preparation. Saving for a house isn't something you can do overnight or even over a few short months. It takes planning, consistency, and in most cases, years of intentional effort. Given how much the housing market has changed since the pandemic, it’s more important than ever to understand what you're getting into.
Home prices have surged more than 50% in many areas, and mortgage rates have more than doubled. That means not only are homes more expensive, but the cost to borrow has skyrocketed too. If you're not planning ahead, it's easy to find yourself stretched too thin, or worse, locked out of the market entirely.
So how do you prepare the right way?
The listing price of a home is just the tip of the iceberg. Sure, it's the number you see on Zillow or Realtor.com, but it doesn’t include your down payment, closing costs, moving expenses, new furniture, or the monthly upkeep that comes with homeownership. These can add tens of thousands of dollars to your actual cost.
For most people, a down payment of 10–20% is typical. I prefer a down payment of 20% to avoid PMI, which is private mortgage insurance, a monthly fee added to most mortgages that are originated with under 20% down payemtns. Plus another 2–5% for closing costs. Then there are property taxes, insurance, utility bills, and potential HOA fees. Add all that up, and the cost of owning a home is significantly more than just the mortgage payment.
Rather than thinking in terms of total home price, it helps to focus on monthly affordability. A good rule of thumb: your housing costs (mortgage, taxes, insurance) should ideally stay under 28% of your gross monthly income. Add in other debts like student loans and car payments, and you want all your obligations to stay under 36%.
But these are just guidelines. What really matters is your comfort level, how much flexibility you want in your monthly budget, how stable your income is, and what else you want to do with your money (travel, save for retirement, support family, etc.). That’s where a financial plan becomes your secret weapon. It helps you understand the trade-offs clearly.
Once you have an idea of what kind of home you can realistically afford, the next step is building a savings plan to match. This is where time becomes your greatest asset. The earlier you start saving, the less pressure you’ll feel when the right house comes along.
Let’s say you’re aiming for a $400,000 home and want to put 20% down, that’s $80,000. Add closing costs of around $12,000, and you’re looking at a $92,000 target. That’s a big number, but if you give yourself three years, that’s around $2,500 a month. Spread it out further, and it becomes even more manageable.
This is why it’s so important to treat home buying like the major financial milestone it is. It’s not a quick sprint, it’s a slow, steady marathon that requires discipline and long-term planning. And that’s okay. The goal isn’t just to buy a house, it’s to buy the right house at the right time, in a way that supports you, your family, and your long-term happiness and financial health.
Once you’re in the home, life doesn’t stop, if anything, it gets busier (and probably more expensive). You'll want to maintain an emergency fund, continue saving for retirement, possibly plan for children’s education, and maybe even consider future renovations. If all your cash is tied up in the house, your flexibility disappears.
The best home purchase is one that fits into your life, not one that takes it over. It should support your values, your goals, and your day-to-day comfort, not stretch you to the point of stress or regret.
Buying a home is a personal decision, but it’s also a strategic financial one. In today’s market, with higher prices and rising interest rates, it’s more important than ever to go in with eyes wide open. At CPJ Financial, we help clients think through the full picture, not just the mortgage. We make sure every financial decision, including buying a home, supports the life they want to live, not just today, but 10, 20, and 30 years from now.
If you’re thinking about buying a home and want a second set of eyes on the numbers, I’d love to help. No sales pitches. No product pushing. Just honest, thoughtful planning that keeps your best interests front and center.
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