With the attractive opportunity to receive up to $8000 from your fellow taxpayers if you are a first time home buyer or have not owned a home for three years, there are some important issues to consider before you buy a home:
Set realistic price guidelines:
Determine what size mortage payment will fit into your monthly budget. As a general rule, your monthly housing cost should not exceed 25 to 30 percent of your gross monthly income (before taxes). Monthly housing costs include your mortgage principal payment, interest payment, property taxes and home insurance.
Don’t forget the extras:
Remember the other expenses you’ll be paying each month. You may also need to pay for items such as moving expenses, new furniture, home appliances, and improvements and repairs. Ideally, you should include in the percentage given above an amount saved as a repair allowance.
Your credit situation:
Before starting your home search, evaluate your current credit situation and credit history. This allows you to take steps to repair your record before you apply for a mortgage.
Remember the tax advantages:
On your rearly tax return, you can deduct the interest you pay to buy, construct, or improve your principal residence. You can also deduct the real estate taxes you pay on your home.