With interest rates being at an all-time low, I can understand the urgency for people wanting to purchase a home. But I caution the first-time home buyer to learn how to budget their money before buying a new home.

I happen to live in a state with one of the highest foreclosure rates in the country. I was so shock to learn that many people loose their homes within the first couple of years. I wondered why so soon. Sure the economy is not the best and people are getting laid-off and having hardships, but some people are simply not prepared for the unforeseen problems and expenses that comes with owning their first home.

When I received a call from a friend telling me about a property less than a mile from my home that was in the process of being foreclosed on, I quickly made arrangements with their agent to view the property. It was a nice single family residence with some minor wear and tear. The family that was loosing the home was a basic middle-class family. I had less than three weeks to close the deal since the home was to be sold on the courthouse steps the following month.

Needless to say I bought the home and had instant equity in the property. Before the closing, I sat down with the previous owners and asked why they were loosing their home. The wife said to me in a matter of fact way,