When you imagine paying a mortgage, does it make you feel a little queasy? Are you worried or anxious you won’t have any money left over at the end of the month?

First of all, you’re not alone. And second of all, there’s actually a term for this scenario: It’s called being “house poor,” when your housing costs eat up the bulk of your income. It’s an uncomfortable way to live, but you don’t have to resign yourself to it if you want to buy a house. You can have a mortgage and still afford the things you want in life.

But if you want to avoid being house poor, you’re going to need to do a little work upfront to make sure your home loan is going to be manageable for you once you’ve bought the house. (And with home values skyrocketing across much of the country, it’s possible that you might not be able to avoid being house-poor, at least at first.)

We’ve combed through the lending data and talked to some real estate and money experts, too, to help you figure out exactly what you need to do to avoid being house poor — before you sign on that dotted line.

What does ‘house poor’ mean?

The basic definition of house poor is that you are spending more than you can afford to on your housing expenses. That means not just your mortgage payment, but other housing costs, too, such as insurance, taxes, and maintenance. When you’re house poor, too much of your income is tied up in your house, making it difficult to pay for the other necessities of life.

How much is “too much” when it comes to housing expenses? Well, there are different measures, but financial experts commonly recommend you spend no more than 30% of your income on housing costs — and 28% is better. So for the median American household income of $68,703, which is about $5,725 a month, you’d want to spend no more than $1,603 a month on your home.

That figure would include not just your mortgage, but your utilities, too. And home insurance and maintenance costs and taxes. Ouch.

How being house poor holds you back

So what’s the big deal if you spend more than 30% on your housing costs? It’s a free country, right? The average American is now spending 35% to 40% of their income on housing — clearly more than experts recommend. What’s wrong with spending 35%, or even 50%, of your monthly income on your house?

Well, consider this: The more of your money that goes to housing, the less you have to spend on other costs. And with the average American spending more on food, healthcare, and transportation, year over year, that’s going to leave less and less for everything else: education, savings, insurance, retirement. And that doesn’t even include the fun stuff, such as brunch, weddings, or vacations.

When your assets are all tied up in your house, you can’t afford to save up an emergency fund or put money away for a splurge. There’s less wiggle room for things that come up in life, like needing a new furnace and central air (that will run you about $7,500 on average) or replacing a roof (a $10,000 average cost).

You might live paycheck-to-paycheck (at least, statistically speaking), so one bad run of luck, one job loss, could put your mortgage — and therefore your home — in jeopardy. And if you have unsteady work (hello, gig workers, permalancers, and contract employees), it’s tougher to predict your finances from one month to the next.

You might even struggle to make ends meet, choosing which bills to pay in a given month, putting necessities on a credit card. You could be racking up finance charges and late fees, and putting yourself further behind.

How do you avoid being house poor?

In fact, Erica Anderson, a Holly Springs real estate agent selling 67% more single-family homes than other agents in the area, says this is one of her best tips for first-time homebuyers.

If you’re trying to buy a house with “an unrealistic budget in a hot market, you’re not going to win,” she cautions. The better solution? “Listen to the real estate professional you trust.”

The best real estate agents are going to be able to give you insight into your particular market’s trends. They will let you know what you can do within your risk tolerance as well as your budget.

“We have some buyers that are gambling like they are rolling the dice in Vegas,” she says.

“But a lot of people — the majority of them — are like me: they are conservative [about pricing] and they do their research.”

With the help of a good agent, they’ve got a leg up on the competition, they know what prices the market can bear, and they can make offers they know are going to win — and that won’t leave them broke.

Know what goes into a mortgage payment

Not everyone realizes this right away, but a mortgage payment actually has several different components to it, known as PITI: principal, interest, taxes, and insurance. You have to account for the total of these components in your monthly payment, not just the price of the house.

Principal: The principal of the loan is the amount you borrowed to buy the house.

Interest: The interest is the cost of borrowing money, usually expressed as a percentage rate (such as 2.5%). With a mortgage, the principal and interest are amortized, so you’ll pay a little of each every month over the course of the loan.

Taxes: Property taxes are collected from property owners and put toward things such as schools and other municipal services. You’ll also pay taxes with your mortgage.

Insurance: Mortgage lenders require you to insure your property, so you’ll need to add homeowners insurance, which you may be able to roll into your monthly payments.

You might also pay HOA fees. An HOA is a homeowners’ association — a collective of people in the neighborhood who enforce mutually agreed-upon rules and regulations, such as exterior paint colors, fence heights, and the like. HOA fees go toward maintaining community areas.

Therefore, your monthly payment is more than just the price of the house — it includes a host of other costs, too. You should use a home affordability calculator to play around with different variables to see how they might affect your potential mortgage payment.

Save up plenty — then save some more

The bigger the down payment you can put together, the lower your monthly payment will be, so it’s helpful to save up as much as possible. You’ll also need to pay closing costs, which can be up to 5% of your home’s loan amount. You can do a rough calculation to estimate how much you should add to your savings to cover the closing costs.

While you’re saving, look into down payment assistance programs. These programs are designed to help you with the down payment, sometimes even covering 100% of the down payment cost, and there are many different options, from federal programs down to the state and even city level. You could be saving tens of thousands of dollars with help from these programs.

Anderson recommends broadening your search to include USDA Rural Development properties. A quality real estate agent will be able to help you find them, and a USDA loan could help you buy a home for no money down at all if you qualify and your income falls within the loan limit guidelines.

Maximize your credit score

Another thing that will help keep your costs down? A good credit score. The higher your credit score, the better the interest rate you’ll be able to snag on your loan.

Lenders give their very best rates to borrowers with high credit scores. You’ll be able to qualify for higher loan amounts, lower interest rates, and even better rates on your private mortgage insurance with a good or excellent credit score.

It takes several months to see improvement on your credit report, so it’s good to start this process right away. The good news is, it’s pretty simple to do; even just buying a few things on a credit card and then paying off your bill right away will help.

You’ll definitely want to get a free copy of your credit report and make sure there are no errors dragging down your score. If there are, request a fix right away.

Minimize your debt

On a related note, now’s a good time to reduce your existing debt, as much as you can. Lenders consider your debt-to-income ratio when they consider whether to grant you a mortgage, because it shows how much you owe as compared to how much you have coming in.

Also, the less debt you have, the better your credit score will likely be, since your debt usage (or credit utilization) is 30% of your credit score.

Plus, if you eliminate the debt now, you won’t have those debts weighing on you when paying your mortgage — leaving more of your funds available to pay toward the house and helping you avoid being house poor.

Consider your goals when saving

Sometimes it can be a real struggle to stay aboard the Savings Train. If your friends are all taking sexy beach vacations, or throwing lavish weddings, or even just posting gorgeous brunch snaps on social media, it can make it tough to stick with your own savings plan. That’s totally normal.

If it helps you, remind yourself why you’re saving: so you can be a homeowner. Sure, you could take a sunny beach vacation, too — but is it worth it, knowing you’ll have to keep renting? Or would you rather forego the brief luxury experience now in exchange for the years of satisfaction you’ll get once you’ve bought your house?

Even something as simple as a photo of your dream house on your phone’s lock screen can serve as a reminder that you’re doing something big and meaningful every time you skip out on something decadent and expensive.

Borrow less than you’re approved for

When you get preapproved or approved for a mortgage, you might get excited at the possibilities you can imagine once you see that nice, big number. But remember, your preapproval limit is just that — a limit of what you’re approved for.

If you want to be house poor, go ahead and spend up to the tippy-top of your limit. But if you want some breathing room, set your sights on a target that’s a bit (or well) below that limit. That will give you a cushion of safety.

“I ask my clients to look at their finances. What are they paying now for rent?” That, Anderson says, is a better indicator of affordability than a 45% debt-to-income ratio on the high side, and it’s better to go with your comfort level.

Spending less than your max limit will give you a more reasonable mortgage payment, and that’s going to make it easier for you to avoid being house poor.

Don’t forget about home maintenance

Finally, if you want to avoid your house eating up all your spare change, don’t forget to account for home maintenance. When you buy your own home, there’s no landlord who will swing by and fix the furnace or a leaky pipe — which means you’re on the hook for the expense.

Aviva Pinto, managing director of Wealthspire Advisors, cautions her clients to stay within 40% or less of their take-home pay for this very reason: You never know what will happen next.

“It will be important, once you purchase the house, that you maintain your budget and don’t start spending your remaining 60% on crazy renovations” once you’re in the home, she says. “Budgeting how much you can spend is important.”

Combined with a robust emergency fund — three to six months’ of expenses is ideal, Pinto says — you’ll be prepared to handle the unexpected home repairs.

To do this, you can build about 1% to 3% of your home’s value into your monthly budget for housing repairs and maintenance. This money might need to cover everything from furnace filter changes and new light bulbs to the occasional new appliance, or even something as big as a new roof.

Go forth and shop (wisely)

In all, avoiding being house poor just comes down to being a little bit strategic. Spending within your means now will give you more comfort in the short-term, and even more buying power in the longer term, as you build equity in your new home.

“I would look at it from an investment standpoint,” says Anderson. “What will I be comfortable living in for the next three to five years? Knowing that the goal is to take the potential equity of that property and upsize it?”

Whether that means choosing a starter home or bulking up your down payment, finding a home mortgage you can afford will help you afford the rest of life’s little luxuries, too. Sounds like a treat worth saving for!