If you have never owned a home but you have been preapproved for a mortgage, it's important to talk with a real estate agent about finding a property that will be a good long term financial investment. You need to understand what you can and should spend, and what properties are more ideal than others. Here are a few things you want to do before you submit an offer on a property, and before you offer any earnest money or pay for appraisals and inspections.
Understand the Mortgage Costs
It can be hard to understand at first what is all added into your mortgage, especially if you are a first time home buyer. You may not be able to spend as much as you originally thought on a house because with the following things, you aren't left with as much for the purchase price:
- Homeowners insurance
- Private mortgage insurance
- Taxes
These are just some of the common things that will be added into the mortgage. Once you understand the costs and what you can afford, you can get an accurate home price to shop for. You also want to put the most amount of money down as you possibly can to gain equity.
Focus on a Good Investment
If you are buying a home, make sure you explain to the real estate agent that you want to make a good investment with your money, and you don't just want to buy a house because it's the most affordable or has a feature that you want. Look for the following characteristics:
- Located in a good school district
- List price is practical with recent comparable sales
- Growing area
- Low crime rates
These are just a few things buyers will be looking for down the road if you have to sell your home and relocate or if you want to upgrade the property.
Once you've looked at these things and discussed them with your real estate agent, you'll be able to start looking at houses that you know you can afford and that are worth the money that you'll have to spend over time to own the property completely. If you are ready to own a home for the first time but you aren't sure where to start or how much money you should spend, let a mortgage professional and a real estate agent help you find the perfect loan and house to make it a reality.
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