7 On Your Side's Michael Finney has advice for first-time home buyers

SAN FRANCISCO (KGO) -- If you're one of the millions of Americans looking to buy a home, you're going to want to hear this advice before you make any big decisions. Consumer Reports says make sure your eyes aren't bigger than your bank account.

That's important advice because according to a recent bank rate report, 80-percent of current homeowners say their current mortgage payments make it difficult for them to save money.

Parents, in particular, have a hard time juggling their competing financial priorities.

Chiara Norbitz and her husband Mike Grubiak just bought their first home.

When trying to determine their price range, they had two goals: keep their monthly housing costs below what they'd been paying for rent, and make sure they had enough leftover to cover all their other expenses and then some.

"We tried to break it into a pie where we were at least saving a certain amount of money every month," said Norbitz

Their bank pre-approved them for a certain number, but Consumer Reports Lauren Lyons Cole says that number can be deceiving. Lenders look at how much they think you can pay them each month.

"But that doesn't mean you can make those payments and still save for retirement, still save for college and still manage to go on a vacation every year," said Cole.

Deciding how much mortgage you can afford is personal, but Consumer Reports experts say a good rule of thumb is to cap your housing costs at 25-percent of your take home pay. This should afford you a little wiggle room to keep up with anything that breaks down.

"You need to have money in case the air conditioner breaks or you need to replace the roof. Owning a home is very cost intensive so keeping your mortgage payments as low as possible will help you afford everything else that goes with it," said Cole.

In the end, Grubiak and his wife found a home they love for less than the bank was willing to loan them, leaving them enough room in their budget to start saving for the next big thing.

"We really want to have a nest egg right now for vacations, emergencies and eventually down the road you know having our first child," said Grubiak.

If you are having trouble calculating a number you can live with, Consumer Reports says working with a financial planner or a third party you trust could be a good move.

All Consumer Reports material Copyright 2017 Consumer Reports, Inc. ALL RIGHTS RESERVED. Consumer Reports is a not-for-profit organization which accepts no advertising. It has no commercial relationship with any advertiser or sponsor on this site. For more information visit consumer.org.