I bought my first house almost 2 years ago. There were many costs that I didn't expected, but I'm glad that I can afford them.
Tips for buying a house:
- If you are paying rent now, save the difference between your future expected mortgage and what your rent payment is now (example, if your rent is $600 and your mortgage is expected to be $1,000, save $400 every month)
- Understand the FULL cost of your monthly mortgage (Mortgage, home insurance, PMI, and so on)
- If you buy a foreclosed house or a short sale, make sure you get the house fully inspected. I have heard horror stories where the previous owners dumped cement down the sinks and pipes
- I was approved for a $250,000 house and bought a house for $130,000, I would suggest not buying a house for the full amount that you are approved on, as most lenders will approve you for way more than you can actually afford
- It is also recommended that your mortgage not be more than around 30% of your monthly gross income. My mortgage is around 25% of my NET income and around 20% of my gross income
- Try as hard as you can to pay down at least 20% of your house or you will have to pay PMI every month. This can be as much as $150 a month!
What tips/suggestions do you have for future homeowners?
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