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The New York Times just recently wrote a great article about the 7 New Rules For First Time Home Buyers.  It’s well worth reading in it’s entirety, but if you’re short on time here are a few gems:

The Basics: Put 20% down, get a fixed rate mortgage, and if you want to be conservative don’t spend more than 35% of your pretax income towards your mortgage.

Dennis Stearns, the financial planner quoted in the article, estimates that owners who do some of the work themselves but contract out bigger projects will spend 3.6% of the homes price on upkeep and repairs every year. For older homes, this amount jumps to 4.5% per year.  Probably not an issue for San Francisco Condo owners, but if you’re buying a Victorian keep this in mind.

Another financial planner, Michael Kalscheur, recommends you either buy an entry level home or stretch to get your favorite home, but don’t settle for anything in the middle. The reasoning is that if you buy an entry level home, you’ll save a lot more so you can get the home you want sooner.  If you stretch and buy the home you want, you’ll stay in it longer and won’t lose money on the transactions costs of selling (6% of the home’s cost or more).