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You've been renting for 10 years; you originally put down a months rent, plus a deposit equal to one months rent, to get into the apartment or house that you are renting. Or perhaps you put down the first and last months rent, plus a deposit equal to the monthly rent, as you were more of a flight risk because of your credit history, or more specifically, your renting history as you had to leave an apartment and break the lease. Perhaps the job market wasn't the best where you were living, or the market does not suit the skills that you have, as was the case when I moved here from elsewhere in the state. Perhaps you just needed a change of atmosphere or wanted to live in a larger metropolitan area; whatever your reasons you have a bit saved up and think that it is time that you take on that big decision of moving into your first home.

Yet the stakes are higher and the consequences graver if you do not approach home buying in the right way. Typically with a rental property, your landlord may charge you between 30% over the price that the property costs him to whatever the market forces will allow. Say your rent is $1,500; the landlord may have his own mortgage of $700 - $1,100 to a bank or real estate corporation, his "profit" of $400 - $800 a month seems nice, until you realize that he may or may not be footing some of the utilities in the unit, and that he has to pay property taxes. It seems practical that if you owned it yourself you would be paying that $700 - $1,100 to yourself in the way of your equity in the unit, but can you really afford the costs associated with owning that property?

Renters do not have to fully realize the costs associated with maintaining a unit, property taxes, and other hidden costs that come with a house, townhouse or condominium. Someone who is used to paying $4,500 to put down on what is realistically a $252,000 property is often ignorant to having to put down the $50,400 on a property towards ownership, which is what the landlord probably did. Most renters do not have that much money put aside. So the first rule of thumb is that one should put down 20% of the price towards a house as a down payment. What if your landlord isn't making a "killing" on his unit and is actually charging you a fair amount in rent; the $252,000 unit is now more like $396,000, and you would have had to put down $79,200 as a down payment using the 20% rule.

Most of us do not have the 20% and couldn't borrow it if our lives depend on it; these days you

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