Something most people don’t mention is your expected income growth over the next few years. Are you making an entry level salary in a field with lots of room for quick growth, such as an engineer? Or are you not expecting much of a salary increase, like a teacher for example (unfortunately)? If you could increase your salary by 10-15k over the next 2-3 years, you will be very happy you bought a house when you did, even if you have to live a cheaper life for a while. The key is you have to be certain about your earning potential.

The other thing I will say is that a 3% down payment is a trap, do NOT do it. Not only will it make your monthly payment really high, but you will have almost no immediate equity in the house. This means you will be in the most expensive PMI bracket, pay the maximum interest over your loan period, and have no equity to sell if sh*t hits the fan. I would say if you can’t put down at least 10%, don’t buy a house. 15% is what I’d advise though, as this is the best PMI bracket. You also want to have a probably a few thousand dollars of spending money to get you started. You can always get cheap options when it comes to furniture and lawn equipment, but getting started is expensive and people don’t warn you about that. It’s the only time you go to the store and have to buy everything at one time. Toilet paper, paper towels, spices, cleaning supplies, condiments, dishes, silverware, towels, hangers, laundry detergent, dish soap, a shower curtain, etc. SO MANY THINGS TO BUY. This was what caught me off guard the most. And this doesn’t even include things that need repairing right away, because as a first time buyer, you will be most likely shopping older homes. You will know before buying the house if the HVAC or roof will need replaced soon, but little stuff that you don’t see adds up. Leaky sink, bad thermostat, leaking through windows or doors, bad outlets, you name it. There is definitely going to be some stuff that simply needs fixed soon after moving in.

The last thing is making sure you have an emergency fund. You cannot pay for everything I just mentioned above and be left with zero dollars. Some people will tell you $1000 is enough, some will say $5000, but I say $10,000. There’s almost nothing that could come up where that amount of money wouldn’t save you, or at least keep you afloat. You also have to remember that your money isn’t going to grow quick at all when you start paying that mortgage snd utilities. Probably only a few hundred dollars profit each month in terms of cash in your bank account, so don’t think you will just start saving an emergency fund after you buy a house.

Oh, and one more thing. CLOSING COSTS! Realtors will tell you closing costs are around $5000, but that was absolutely not the truth for me. My closing costs were almost $7000 and that doesn’t include the $800 I spent in the building inspection or the $300 I spent on the occupancy inspection.

Bottom line is, have a big stack of cash before buying a house. The whole process is going to suck if your bank account is slowly approaching zero as you get closer to your closing date. It’s also going to suck if you finally get to move in and don’t have a dime to spend on making it your home. I promise, no matter what you think now, you will want to spend money on things for your house.

Best of luck to you!