Do You Need Private Mortgage Insurance?

Do You Need Private Mortgage Insurance?

3 Tips To Narrow Down Options When Buying Your First Home

by Luke Fields

Buying your first home can be an exciting process, but the long list of available properties can make the process physically, emotionally, and financially overwhelming. Even if you have a general idea of the location you want to live, the search for real estate property can be challenging. Fortunately, this guide and the help of professional agents can help you narrow down the long list of properties to ensure your first home purchase is a smart one.

Price Does Matter

You will need a preapproval from your preferred lender before agents will show a home. Once you have a preapproval letter, you may be excited about how much "home" they believe you can afford. The lender designates how much you can afford based on your income and your bills, but they do not factor in other living expenses, such as food and entertainment.

Even though you have a preapproval, avoid looking at homes that are at or above this price. This will not only narrow down the long list of potential homes, but it will also prevent you from having a mortgage that you may not be able to afford.

Think Long Term

A home is an investment that should be considered long term, but most first-time buyers believe they will only live in this home for a couple of years. You may consider a smaller home with fewer bedrooms that is closer to work ideal compared to a larger home with an extra bedroom that will require a longer commute. However, that extra bedroom may come in handy over the years. In addition, an extra bedroom will be more appealing to other buyers if and when you decide to sell.

While surprising to learn, most people will stay in their home for approximately 13 years. Due to this estimate, you should consider your first home a long term commitment and choose a property that will work for your upcoming future.

New Versus Old

You can narrow down the list of available homes by deciding if you prefer new construction or older. Fortunately, there are benefits to each option, so you should weigh out the pros and cons of each.

Most new construction homes include warranties and incentives, such as a new appliance package or builder-paid closing costs. On the other end of the spectrum, you may be able to buy an older home at a lower price and fix it up slowly over the years. Many sellers are now offering to pay part of a buyer's closing costs as well, so you could receive some incentives when purchasing an older home.

Narrowing down the long list of potential homes is possible with the right knowledge. Using this guide, you can find your first home in an efficient and stress-free manner.


About Me

Do You Need Private Mortgage Insurance?

Welcome to my website. My name is Larry Silva, and I want to talk a bit about private mortgage insurance. You may have heard the term PMI mentioned when you were in the process of purchasing real estate. When I first heard my lender talking about PMI, I was very confused. It was my realtor who sat me down and explained what private mortgage insurance was and when someone is required to purchase it. He told me that PMI is not lifelong insurance; it can be cancelled when the mortgage principal balance reaches a certain point. Once it was explained to me, private mortgage insurance was no longer a mystery or a confusing concept. I would like to pass on what I learned and hope that you find it to be of value.