Here is a tip from experience for potential homebuyers:
Generally when you purchase a home, you go in and ask the agent for a quote on how much of a loan you can get for a house. This seems to take into account the minimal of outstanding debt you have, but it doesn’t take into account things like buying groceries, electric bills, cable bills, etc. So you can get an offer for a nice-sized loan, only to find out that once you close and get the home, your combined bills are quite high, causing a financial pinch as you try to make ends meet. So the loan you were able to “afford” really isn’t affordable.
There is another option that I would recommend. When you go in for a home-loan quote, go in prepared.
Before you ever go, figure out a budget that works for you. Find a way to estimate what your electric, water, and other bills might be. See how much you have left. Out of that, leave yourself a cushion for savings, investing, emergency repairs, and maybe even paying off your mortgage early. In other words, determine how much you want to actually pay per month for a house. (Secondary tip: If you have any other outstanding debt, such as a car payment, credit card bills, etc., paying this off first will greatly increase how much you can afford for a house payment.)
When you go for your loan, ask the agent to run the information with current APRs based on how much you are wanting to pay per month as a mortgage payment. They can then give you a good idea of what your range would be for the cost of a house (and it will almost certainly be less than what the bank would have offered you anyway). It may not be as large of a house as you would have been able to “afford” the other way, but it will truly be a house you can afford based on your financial circumstances. Then you can live comfortably and at ease in knowing that you aren’t stretching yourself financially beyond what is doable for you.
You work hard for your money. Be a good steward and leverage it for your benefit!