Set the down payment. Most lenders and housing experts say homebuyers should put 20 percent down. Corbett highlights several reasons for this figure: You instantly gain a little equity, you get a lower interest rate on your mortgage and you're "viewed as a more serious, more qualified buyer when you're competing with other buyers for a property." However, it's also important to set aside enough for a sufficient rainy-day fund.
Claim your tax benefits. Some of the deal's closing costs are generally deductible, says Mark Steber, chief tax officer at Jackson Hewitt Tax Service, but they're not always the costs consumers assume will be deductible. "Many new homeowners think they can claim all their expenses of buying their home on their tax return. But, most of the cost of business expenses, like the title insurance, attorney's fees and commissions, are not tax-deductible," he says.
To get the most from your tax refund, Steber cites these three deductions:
• Interest. The pro-rated interest for the remainder of the month from closing until the end of the month
• Real estate taxes. The pro-rated taxes for the time the buyer owns the home that may be paid at closing
• Points paid. As long as the points are a general practice in the area and within the average points for the area, they are deductible as interest
The bottom line. "You need to be able to spot a good deal when you see it and you have to be able to move forward on it quickly when you do," says Corbett.