the background.
Subtract this total from your take-home pay and you’ll know how much you can really spend on your new home each month. When calculating this figure use a mortgage calculator to research current interest rates. This will give you an estimate of what your mortgage payments will be. You may even realize that you genuinely cannot afford the home that you desire and that you need to work on reducing your monthly expenses or increasing your income before you even start looking.
DISREGARDING HIDDEN COSTS
This is another common mistake that many first-time homebuyers make. If you neglect to prepare for hidden fees, you might be in for a surprise. Closing costs are a good example of hidden fees, as they usually include several fees that cover final housekeeping matters. Once you’re a homeowner, you’ll have additional expenses on top of your monthly payment. You’ll be responsible for paying property taxes, insuring your home against disasters, and making whatever repairs the house needs (which will occasionally include expensive items like a new roof or a new furnace). If you’re interested in purchasing a condo, you’ll have to pay maintenance costs monthly regardless of whether anything needs fixing because you’ll be part of a homeowner’s association, which collects a couple of hundred dollars a month from the owners of each unit in the building in the form of condominium fees. Before signing the homebuyer’s agreement, it would be wise on your part to ferret out any and all hidden fees and incorporate them into your budget.
NOT GETTING A PRE-APPROVED HOME LOAN
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