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5 Tip For New Home Buyers

Updated on March 31, 2012

Searching for a new home is an exciting and rewarding experience for those that undertake it. The ones who have taken the time to get the correct information first will have an easier time at it. So, If you have not done any research into buying a home, I have 5 of the most essential tips right here to help you get started.

Are You Planning to Buy a New Home This Year

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1. Check your budget

Before, we can even begin to house hunt we have to understand a realistic view of what we can afford. The idea with any type of home is to make sure that your home payment is no more than one third of your total annual income. So, take you and your significant others income and add them together and divide by one third. That is where you need to be in your housing monthly payment. If, your dream home is out of your price range then I suggest you keep saving your money to get the required down payment, so you can keep it in the one third of your income range.

2. Down Payment

With the housing crisis getting further behind us what have, we learned? Well, the banks have learned not to take a risk on anyone now to purchase a home. So, the lending requirements of the banks including the down payment are going to be a lot higher. Typically the banks will accept a twenty percent down payment on your home. This is going to be necessary to first get you the best possible deal on home. Gone are the days of zero down, now if you are having trouble getting a total of twenty percent there are options you can have that will assist you to reach that goal better. They are called down payment assistance plans so before you start your hunting make sure you have the minimum payments that will be required down first.

3. Check your Credit Score

So, you have your budget all lined up and enough money saved for the down payment on a house. But, there is one more thing you need to check, and that is your credit score. This will be the first thing that lenders will look at to decide if you are worth the risk or no to lend money to. So, you can have your budget and your savings but still hit a road block if your credit report is not accurate. So, the first things you need to do is call or write to the 3 major credit bureaus and ask them to send you your credit report. Look it over extremely carefully and dispute anything that is inaccurate or old. The credit companies have only 30 days to respond to each inquiry and will verify the information and either let you know the outcome or delete it from your credit record.

4. Time to House Hunt

Now that you have the three required financials it is time to house hunt. But, there are so many options to choose from. The best place to start is with an online MLS system that can help you narrow down your search. The MLS system is a national database of homes for sale all across the county. You can easily narrow down your search by price, location amenities, and more. Another useful option for this tool is that it will let you compare prices of homes that have sold in the area that are similar. Knowing some of the sales prices and prices for these homes are an excellent starting point to get even more information on an initial offer.

5. Make the Initial offer

Once you have found your dream home you are going to want to make an initial offer. With your realtor go ahead and draw up an initial sales contract and put all the information from the sale price, down payment, concessions, and all other pertinent information. There are many different things to consider when entering into a sales contract. The one thing that I believe is one of the most important is that you should include a sub line that the contract is contingent on verified home inspection. The inspector will be able to tell you the true condition of the home. If, there are things that need to be taken care of then you have the right to ask the seller for those repairs. If, the seller refuses remember this is a buyer’s market just walk away and keep searching.

Staying the course will keep you on track. Expect the whole home buying process to last roughly four to six months. It is a long time to wait, but you are purchasing a new home after all. Make sure you read and understand all the contingencies related to the contract and if you’re not sure ask! But, most of all enjoy the home you choose to live with your family.

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