Are You a Digital Nomad? If yes, chances are, you have been to many cities and has fallen in love with many, if not all of them. There’s no way you would want to settle in a certain places in the future. But, it’s also not impossible to have that wanting feeling to call a particular place your home. You might have loved Barcelona‘s awesome weather, Paris’ endless enchantment, Seattle‘s laidback life, Venice’s old-world charm, or Tokyo’s rich culture and thought of settling in one of them, visiting the others as often as you please. In that case, buying your own home is a wise investment.

There are misconceptions at times, as to how much money you should put down for a home. Many people believe you must put down 20% of the total costs to get a good mortgage. That’s not necessarily true. There are of course benefits to putting down more, but it is not necessary to put down that much and there are other programs to assist if you have concerns with having enough for your preferred Percentage down Payment.

How Much Did You Save?

Answering these questions is a great starting point for your home shopping adventures. Say you have saved $10,000 for a downpayment. If you would like to get a lower interest rate, you should keep the total cost of your potential new home under $100,000. However, you can potentially use it towards a more expensive home but the rates will generally rise from there.

Additionally, there are programs that are put in place to help you if you aren’t even able to save up that much. To help you come up with more exact amounts use a house payment calculator to establish a baseline for how much you should be saving.

You can also start to adjust your budget beforehand if you know that you will be moving within a specific time frame. Expects suggest that you don’t spend any more than 30% of your income on housing. If you make $40,000 a year, you shouldn’t spend more than $12,000 of that annually on housing. And that means housing including taxes and insurance. Using this method and the calculator, you can set up a budgeting timeline to reach your savings goal.

How Much Do You Make?

What goes hand in hand with saving? Making money of course! A lender is not going to give you a loan if you don’t have income. So if you don’t have a job, you’re going to need to get one before you attempt to purchase a home. Additionally, if you have a partner that you are moving in with, their income needs to be established as well.

The combined income between yourself and your partner can really help you increase the amount you get your mortgage for. Once again, if you are looking at spending only 30% on your housing each month, this amount increases with double the income. If you and your partner make $40k each a year, that gives you an additional $1,000 each month for housing budget.

With $2,000 monthly payments you may be able to get a mortgage totaling up to $250,000 or more. This all depends on your local real estate climate, how much you are able to put down, and obviously your income. Another detail you must consider is your and your partner’s Credit score.

What Does Your Credit Look Like?

Obviously, items on your credit reports such as bankruptcy, foreclosures, or garnishments are not going to look good when your lenders are assessing your risk factors. However, I would say these are less common for the majority of those looking to get homes at this time. But your credit still matters and it will be reviewed.

Credit history is crucial for determining how “fit” you are to lend money to. If past lenders didn’t get their payments on time, you can bet that it will be shown on your credit report and be reflected in your score. Additionally, this is where your partner can either help the situation or hurt it. If your partner has a terrible score but yours is good, then you will not have the same chances of getting a quality loan as if you both had good scores.

This shouldn’t deter you of course, because as mentioned before, there are plenty of government-funded programs that can assist. Credit is something that many people struggle to establish and maintain properly if they were never shown the way. Based on all of the points above along with your credit, this will determine how eligible you will be for what kind of loan. Always talk to your financial advisor or real estate agent for the most accurate and trustworthy advice. After all, they are the pros!