Before you start looking for your first home, take a look at these common mistakes first-time homebuyers make.
1. Not Knowing Your Housing Budget
Figure out exactly how much you can afford to pay each month in shelter costs. Your total monthly housing costs should not exceed 30 percent of your monthly take-home pay. Be sure to include:
- Mortgage payments, including interest and private mortgage insurance (PMI) if applicable
- Property tax
- Homeowner’s insurance
- Maintenance costs
- Homeowner association fees
2. Looking Outside Your Housing Budget
Don’t even look at houses that fall beyond your budget. It’ll only set you up for disappointment.
3. Purchasing Based on Future Changes
Never make a financial decision based on projected future income. Instead, base your decision on what you can afford now.
4. Treating Your Home as an Investment
First-time buyers often anticipate selling their house for a large profit in five or 10 years. Real estate is never a certain investment, and a house should not be purchased with the sole intention of earning a profit.
Do you have more questions or need help? Check out How to Navigate the Home Buying Process, or talk to one of our experts by calling (602) 683-1000.