The New York Times throws cold water on those who want to buy a home at the top of their budget. Here’s some advice to first time homebuyers:
- Save for a higher down payment (and bigger equity) rather than rushing in to get a slightly lower interest rate.
- Don’t stretch to make a payment. Be able to continue saving each month as well a paying your mortgage.
- Factor in the carrying costs (maintenence, property taxes, insurance).
- Consider your risk tolerance. How stable is your income? How long could you continue to make mortgage and property tax payments if your income was reduced?
- Don’t count on continued rapid price appreciation. It’s bound to slow down.
Photo credit: Flickr / Sundaram + Annam
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