Buying your first home is exciting, but it's easy to make costly mistakes. Here are some common pitfalls to avoid.
Before house hunting, figure out exactly how much you can afford to pay each month in shelter costs. Your housing budget includes more than just your mortgage payment.
Be sure to include:
Your total monthly housing costs should not exceed 30% of your monthly take-home pay.
Once you've established your budget, stick to it. Don't even look at houses that fall beyond your budget—it'll only set you up for disappointment.
Never make a financial decision based on projected future income. Instead, base your decision on what you can comfortably afford right now. That anticipated raise may not materialize as expected.
First-time buyers often anticipate selling their house for a large profit in five or 10 years. While homeownership can build wealth, real estate is never a certain investment. A house should not be purchased with the sole intention of earning a profit—it should be a place you're happy to call home.
By avoiding these common mistakes, you'll be better positioned to find a home that fits your lifestyle and budget, setting yourself up for long-term financial stability and peace of mind.
Download our infographic the 4 common mistakes homebuyers make!