Even with the market shifting to the side of the house buyers, first time lookers need to be wary. It is very easy, especially at a time like this, to bite off a chunk of debt far bigger than you can chew.

First thing that new house buyers should think about is how long they are willing to stay in debt. Most lenders are pushing long term loans that will have buyers paying off mortgages well into retirement age. A little known secret is that house buyers can get lower interest rates on shorter loans. Not only will you pay off the mortgage faster, but you will save yourself a bundle in interest payments in the long run.

The next thing that should be considered is existing income. Many lenders will take into account all the income in a household. Old timers will tell you that you should never borrow on more than one income. Save the other money in an emergency fund, or even better make extra payments on your mortgage.

The final thing that new house buyers should think long and hard about is the percentage of income that will go towards the payment each month. Lenders will sometimes allow as much as 45% of the income for a payment. This allows the new buyer to get more house, but it doesn't leave any wiggle room for possible problems in the future. The safe bet is to stay within just 25% of existing income.

Becoming a house buyer is no small step. New borrowers need to plan for the long term and not get caught up in the feelings of the houses that will be shown to them. Keep in mind that the agents showing the houses and the lenders are all out to make money off the deal - the more you spend, the more they will make. In the end, it seems they aren't that concerned if you can actually afford what you are buying.

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