Purchasing a New Home: A Guide for Beginners

Buying a home can be a very daunting task...especially if it's your first time. Many overzealous home-buyers make many mistakes in the preliminary stages of buying a home, and then end up putting their newly-built houses for sale. You can avoid becoming a "For Sale" home-owner statistic by gaining as much information as you can prior to putting any money down, and by always reading everything before you sign it and understanding exactly what is going on. Keep in mind that the home buying process is very time-consuming. You won't be able to get your dream home in one day (unless you're a super-rich, manipulative mongrel!), but eventually you'll be watching TV, with your feet propped up on an ottoman, inside your very own home.

The first step is finding out how much you can afford. Find out what your credit is by accessing your credit report. If you have any outstanding problems, clear them before heading over to a lender. If you have a good credit rating, this will translate to lower interest rates. If your credit score is at least 680, lenders will take a liking to you. As a prime candidate, you would qualify for a low mortgage rate, which is always an excellent thing.

When thinking about a price home, be realistic. Yes, pricier homes in expensive neighborhoods are great, but not if you're a commoner who has to work hard for his money, as opposed to those who throw balls and make passes for a million bucks. (Not fair, is it?)

Become pre-approved for a mortgage from a mortgage broker/lender. Settle for comfortable monthly payments. (In an ideal world, mortgage payments should never be higher than thirty-six percent of your total income. Anything more than that can result in much financial stress, and an eventual "For Sale" sign on you front lawn. Be aware of this!) Once you are pre-approved for a loan, you will know exactly what your price range will be to begin shopping for real estate.

Find out what kind of real estate is right for you. Do you wish to be close to the city, or on the outskirts? Do you want a one story, or two? Make a list of what your "dream home" should and could have. Prioritize the list with what you actually need from what you want. If you have a handicapped family member, of course you will want a home that will be able to address the needs of that person. Keep these things in mind, and be very realistic.

Find a reputable real estate agent to help you in locating property in an area which appeals to you. This real estate agent will try to help you look for potential home areas, while keeping your price range and preferences in mind. After your agent provides you with a reasonably priced list of homes that are available, ask him to drive you by the neighborhood. Check out the homes that are for display, or that are not yet occupied. If you have children, look for a location that is near a school. Also look for a location that has good potential for future appreciation in case you decide to sell your home someday. Consider factors such as freeway access, military bases, work commute time, safety, and recreational options. If you're a golfer, you probably want to have good access to a nice, green lawn in which to practice your sport in. Look around; don't feel pressured into choosing an area. Go to different neighborhoods and find out what's right for you and your family.

When you have found the home that you're pretty sure you're ready to move into, compare the price of it with the other homes in the area. Have your real estate agent assess the value of the home. If everything looks great, read all the paperwork thoroughly, and be prepared to write an offer! Keep in mind that if you have a twenty percent down payment, you will be hugely benefited with low monthly payments on your home, as opposed to your whole check for that month! If you don't have at least a twenty percent down payment, you will be forced to purchase private mortgage insurance, which will increase your monthly payments.

I haven't covered everything there is to know concerning purchasing a new home. Granted, there is a lot of information to know. You should learn about finding a good real estate agent, what to look for in your new home before signing away, and how to improve your credit report. But these few tips are enough to oil the clockwork in your mind, and get you ready to make the purchase of your life. Happy home-buying, and best of luck to you and you family.