What Not To Do

Get a 50-year Mortgage

Nearly three-quarters (74%) of Americans planning to buy their first home in 2026 said they would consider using a 50-year mortgage if available, per a TD survey.
Here is what you will pay as an example for a $400k home purchase with 3% down, 6.75% rate

This is not an affordable house that you think you are getting at $400k. It is a small house with a Huge price tag. You are house poor.
Instead of creating generational wealth by buying under your means, you are creating a generational mortgage.

A couple was making extra payments on their loan without realizing the extra money was being applied toward future installments instead of directly reducing the principal. While it was great that they were paying down their debt, the money was not well spent.

When making extra payments on the loan, you have to make sure that they will go towards the principal amount. Lower principal amount also lowers how much interest you will pay over the lifetime of the loan. Additionally, when you start out with the mortgage, in your monthly payments, you are likely paying about 20% towards principal and 80% towards interest. When you lower your total outstanding balance, you will lower how much you pay monthly toward interest and increase the amount for principal.

For instance, if you have a $500k loan, and your monthly payment is $3,000, $500 of it would go towards the principal via standard payments and $2,500 towards interest. If you pay down the principal to, let's say $300k, after a few years and keep the same $3,000 monthly payment, you will have $1500 going towards the principal and $1,500 towards interest. At this point, your payment is almost a 50/50 split. That is huge!

The biggest difference here is that by doing this, you will also pay about $250,000 less in interest over the term of the mortgage!

A mortgage payment of no more than 30% of your salary
Total debt ratio ≤ 36% of gross monthly income
Keep an eye on rates, but do not fully rely on these to make a decision
Get fully underwritten, not just pre-qualified. A pre-qualification is weak. A pre-approval is better. A fully underwritten approval is strongest. It makes offers more competitive.
Wait for the price of a house to go down. They will not. They have not and are very unlikely to diminish. They might stay flat. If something outrageous happens, they will drop. But when that happens, you might not be able to buy it.