Mortgages

If you are looking to purchase a home, the first step - before you go to see houses - is to get pre-approved for a mortgage.  It's important to understand what you can afford.

Here's a few things people forget when they budget for their home purchase:

• Your monthly payment includes the mortgage (principle and interest), plus taxes, plus home owner's insurance, plus home owner's association and/or property maintenance fees.
• You need to budget for your utilities.  If you are in an apartment where water is included, and your electric bill is small, remember that you'll be paying for the water and your electric bill will be bigger as you are heating and cooling a bigger space.
• Your electric bill will also increase if you have a pool or a new HD flat panel TV too.

If you decide to get an adjustable rate mortgage (ARM), make sure that you can make the payment amount for when the rate adjusts upwards.  If you can't make that payment today - don't buy the house.  Instead, buy a home that you can make the payments on.  ARM's are one of the reasons for the mortgage crisis of 2007/2008.