A fixed rate mortgage is ideal for a first-time home buyer. It gives you a payment that you know is reliable and that you will expect each month. This is something that you might want to consider if you plan to stay in the home for an extended period of time. Try to find a home to buy when the interest rates are as low as possible. If you can find a home that you like in the area you want to live in, then consider talking to the mortgage company about helping to reduce the asking price of the home. Some sellers will do everything possible if they really want to sell the home so that you can get it at the best price. Your mortgage will reflect the low selling price, and your wallet will thank you.
Another issue you will want to address is what you can afford. My own personal experience is that when buying a house, do not only stop at what the price of the monthly payments will be. Also consider a few, hopefully, minor renovations within a few years unless the place you are buying is basically new. You may not actually end up doing any, but there are several things that you may want to fix up as you live there for a while. If you have maxed out your payments, you will be stuck not being able to do any repairs or fix ups if the time comes when you need to. The older your home is, the more you may want to tuck away for the just incase fund. While you will have insurance, there are issues that can be fairly costly that insurance may not cover such as appliances needed replacing, plumbing repairs, roof repairs, broken windows/doors etc. A house in any form is a great investment but there is more to paying for a house than the mortgage itself.
source: 20smoney.com
