What are some things a first-time home buyer should consider?

Answer

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Always get preapproved – not prequalified – from a lender before you start house shopping. You must know the size of the mortgage for which you qualify beforehand.

Consider all expenses

Even if you have a decent down payment and a good mortgage rate, there are still closing costs – perhaps as much as 5 percent of the purchase price. Besides your monthly mortgage payment, you’ll pay real estate taxes, utilities and insurance costs. If you buy a condo, there are monthly maintenance fees.

View mortgage rates in your city

Do your homework

Even if you love the house, check out the neighborhood, the quality of the schools, zoning and the area’s growth potential. Always buy with an idea of resale value in mind.

Avoid maximizing your loan

You might qualify for a loan far beyond your expectations, but that doesn’t mean you must buy the most expensive house you can afford. Stuff happens, and if you’re spending all of your money on your house, you could end up in serious financial difficulties. The general rule of thumb is not spending more than 28 percent of your income on housing.

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