M&I, a part of BMO Financial Group, recently issued some advice for first time homebuyers. Although M&I is located in Indiana, the tips apply to non-Hoosiers, too.
How does this sound?
Assess Affordability It's widely accepted advice: Housing costs should not take up more than one-third of your income. Housing costs include the mortgage payment, property insurance and taxes.
Getting Down with the Down Payment It's another simple math fact: The bigger the down payment, the less interest you pay. For those who have trouble saving for the downpayment, consider opening a special savings account that automatically deducts from your checking every month. Don't touch it!
Choose the Right Mortgage There is no one right mortgage. There is a right one for you, however. If possible, choose a mortgage with a shorter life. You'll be paying more monthly, but less overall.