5 biggest mortgage mistakes

Buying too much home

Many Americans discovered during the housing crash that buying too much home can be a financial killer.

As a general rule of thumb, you should not spend more than 28% of your gross (pretax) income on housing. This includes principal, interest, taxes and insurance.

So, if you're making $50,000 per year, that's no more than $1,166 per month.

That might not get you much in some areas, but with interest rates at historical lows and home prices well below their pre-bubble highs, you should be able to get a good deal. In fact, we recently found great homes in eight U.S. cities that you could buy with a $1,000 monthly mortgage payment.

To get started, our calculator will show you how much you can afford to borrow.

But just remember, if too much of your income is going to your house payment, it's going to take away from other financial obligations, like saving for retirement.

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