One common dream that all of us share is to have a home of our own.  Many save as much money as they to place as a down payment on their dream home.

However, many recently have suffered what they never thought was possible. They lost their homes but was it all due to the housing bubble or errors on their part?

When you decide to purchase a home, many tell you it’s the best investment ever.  If you need money, don’t worry you have equity.  It came to a point that owning a home was a way to get rich.

Many purchased home after home, trying to make a little money but in the end, lost it all.  After all this, one thing we should always keep in mind, learn to separate fact from fiction.

Remodeling

Here is one of the mistakes many homeowners do, remodeling the home they purchase.  Many believe that if they remodel a home, that is an investment and will make up for it when they sell the home.  It’s not true; you only recoup a percentage of the money you put in.  If you plan to remodel, do projects that give you the most return on your investment, such as additional living space, minor kitchen upgrades, repairs or new roof and entry doors.  Keep it to a minimum, with today’s market you won’t be able to ask for what you believe the home is worth.

Down Payments

When buyers plan to purchase a home, they are urged to place large down payments, at least 20%.  Doing this means they will borrow less, you don’t need mortgage insurance and if you need sell, you have that cushion.  Well this is not necessary, you can get a FHA loan with a down payment as low as 3.5%.  This is the better way of purchasing a home.  Buyers with mortgage insurance can get lower interest rates and you can get a home now homes are selling at lower prices.  By doing this your money is not all tied up and you can save that extra money for future repairs, emergencies, etc.

Buying / Renting

You hear this constantly that buying is better than renting.  At one time it was the perfect thing to do, purchase a home.  Of course the value of a home was going up and up, making it a worthwhile purchase.  Now things have changed and due to the mortgage meltdown, many are postponing their decision to purchase a home.  Why?  Well, money is scarce and in a home you always have some type of repair.  If there is a leak in the roof, you are looking at over $10,000.  Renting eliminates that headache; all repairs are the owner’s responsibility.  For those that do decide to purchase, it is to live in, no longer to make money.

Suburbs

Land in the suburbs is a lot cheaper so buying a home sounds like a good idea, especially for first time buyers.  Well there are hidden costs that many are not aware of.  When you live in the suburb it means you are farther away from work, stores, friends, schools, etc.  Any savings you thought you would have go away and quickly.

Depending on the area, you could have an additional cost of $1,500 to $3,500 a year.  Many Americans spend at least a 100 hours a year commuting.  Is this worth it?  By the time you get home or to work you are frustrated.  Time is valuable so when you decide to purchase a home, make sure it is a good deal and there isn’t much commuting involved.