Top 5 Mistakes First-Time Homebuyers Make (And How to Avoid Them)
ByOlivier
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2. Underestimating Homeownership’s Total Cost
The Error:
A lot of first-time homebuyers overlook the other recurring expenses of home ownership in favor of concentrating solely on the down payment and monthly mortgage.
Why
The issue is that:
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You might purchase more real estate than you can actually afford
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Unexpected costs can deplete your finances
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It raises the possibility of payment default
Ways to Prevent It:
Aside from your mortgage, set aside money for:
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Property taxes
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Insurance for homeowners
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HOA dues (if applicable)
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Utilities
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Upkeep and repairs
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An emergency fund for unforeseen expenses
As a rule of thumb, your monthly housing expenses should not exceed 30% of your gross monthly income.
