Are you already to go shopping for that first house? Are you armed with your pre-approved mortgage, and your wants and needs list?

Before you get too excited, take a look at that pre-approved mortgage amount the bank gave you. I know how exciting it looks to be allowed to borrow that much, but do you like the idea of being house poor? Not likely, so before you lose your head when you are looking at those shiny new houses with the perfect kitchens, or the great theatre room, just remember how much this is going to cost you per month.

Really take a look at your monthly bills. You were just pre-approved for the mortgage, but do you know how much utilities are going to cost? Or the property taxes? Or the house insurance?

If you have a house in mind, that is at the top of your pre-approval, really ask yourself if you need to be stretched to the limit like that. Sure the bank said it was OK, but do YOU like to be that stretched, will you feel OK, will you sleep at night? Is it is possible to see other houses that maybe need a bit of work, that are in a lower price range?first time home buyerCredit: diane palmer

You need to think about that when you are looking at houses with your agent. If you have other things you would like to do, then really consider whether you should push the limit on that mortgage payment, and not have much leftover if something goes wrong. With any home ownership, you should try to have a cushion of money that you can slowly build up, for "emergencies".

So, unless you are looking at a brand spanking new house full of warranties at the top of your pre-approval, you should really step back and have a good think. You could get away with large payments on a new house, because repairs would be covered under a new home warranty, but even then, do you need to buy new furniture?, plant a garden?.

So, be careful when running around looking at houses clutching your "pre-approval" from the bank. See if you can find a house, that will not make you house poor. If you have other financial goals, then you should look at this house, and consider whether you will enjoy it or resent it, if you can't do the other things you enjoy.

Once you have decided just how comfortable you are with what amount of payments you would like to make per month on a house, then you can look at houses in a different price range. It is not usually a good idea to go to the top end of your approved price. You also need to allow for closing costs, and moving costs.

If you become totally aware of your financial commitment per month, and what will allow you to sleep at night, then you have won half the battle. So many people get so wrapped up in the idea of a new house, especially that first one, that they gloss over any expenses that may come with the price tag. A good agent will also help guide you in the right direction.

This will likely be your biggest investment, and venturing into the real estate market can be scary, but if you arm yourself with information and knowledge of yourself and your finances, then you will know which house you can afford and which ones you cannot. Then you can move in, and sleep at night.

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