From location and number of bedrooms to parking and HOA fees, there are numerous factors to consider — both financial and personal — when it comes to taking the plunge into homeownership. Before you start looking at potential homes, there is one thing you’ll need to figure out first: how much you can actually afford to spend on your home. The following are some guidelines to help you reach that magic number.

Tip No. 1: Establish your monthly budget

Determining how much you can realistically afford to spend on your mortgage takes more than simply looking at your current rent payment and engaging in a bit of extrapolation. There are other expenses — including utility bills, homeowner’s insurance, maintenance costs, repairs, property taxes, HOA fees and water bills — that you’ll need to factor in as you work out a monthly mortgage budget that won’t break the bank and will leave room for other important short- and long-term financial goals.

Tip No. 2: Don’t skimp on your down payment

You’ll want to keep your potential home in a price range that allows you to make a down payment of at least 20%. Why? If you put down less than 20%, you’ll likely have to pay for private mortgage insurance (PMI) at a rate of approximately 0.15% to 0.25% of the loan amount — and that’s on top of your mortgage interest rate. If you’re close to that number, taking a little bit longer to save more of your salary — along with any raises, bonuses, gifts, side hustle money and proceeds from CDs or savings accounts — is like giving your future self a pile of cash.

Don’t forget to factor in closing costs as well: Your realtor will help you better gauge exactly how much you can expect to spend, but homebuyers typically pay anywhere from 2% to 5% of the purchase price of their home.

Tip No. 3: Location matters

First-time homebuyers looking to purchase a home in major, high-demand cities such as New York, San Francisco or Boston should expect to pay a premium. Accordingly, that 20% down payment becomes all the more important and you’ll want to give yourself even more time to save. Research up-and-coming neighborhoods to see if good deals can still be found amidst rising prices. Look for fixer-uppers in already established areas. If you’d prefer to skip straight ahead to your dream house, however, now might be the perfect moment to chase that promotion or ask for a raise — you never know!