Must Dos Four Things to Become Familiar With Before You Buy Your First Home

Purchasing a home is one of the largest investments, if not the largest investment, that you will ever make. Many first time buyers have been surprised by setbacks during the different aspects of purchasing a home. In a lot of instances, negative things could have been avoided if the buyer simply took the time to research information and spend time in preparation. Once you have determined your house price budget, take a proactive stance on preventing the most common mistakes. The following are four things to become familiar with before buying your first home:

Before You Buy Your First Home, Become Familiar With the Neighborhood

Ensure a happy stay in your new home by researching the neighborhood you intend on living in. First, if you have children, research the local school district. Do they abide by your personal standards of excellence? If the school your child attends is public, did they rate well on meeting federal standards?

Next, visit the local police department's website. This is where people are able to find information on police activity in the local area. Just because a neighborhood looks great on the outside does not mean that criminal activity is not present.

Finally, talk to the neighbors. Ask them about crime. They usually have the inside scoop on happenings in the area. While you are at it, ask about morning commute times and the intensity of traffic in the mornings and evenings. Newer housing tracts built a distance from major streets sometimes have a hidden nuisance of major traffic backups on the local streets. You may also want to ask how far the nearest urgent care, fire station and police stations are to determine how long it may take for help to arrive if needed.

Choose the Best Mortgage Product

In general, there are two types of mortgages: adjustable rate mortgages and fixed rate mortgages. Adjustable rate mortgages or (ARM's) start out with a low interest rate and payment making them very attractive. The downside is that after a predetermined amount of time, the interest rate rises to either meet or exceed the LIBOR or London Interbank Offered Rate. The hidden danger here is the resulting rise in the monthly mortgage payment. Some people have had their mortgage amount rise so much that they could no longer afford the home. Currently, it would be wise to enter into a fixed rate mortgage because the rate will not change once you are locked into the loan.

Credit and How It Affects Your Purchase Power

Another area of concern for the new home buyer is their credit report. Mortgage lenders rely on the combined credit rating from the three major credit reporting agencies: TransUnion, Experian and Equifax. This combined score is called the Fair Isaac Score or FICO. It plays a major role in the interest rate of your loan. Before you enter into a mortgage, check your credit by contacting the agencies. If there are any blemishes such as unpaid bills, be sure to pay them before purchasing a mortgage for the new home. Being patient and doing this will ensure that you pay a much lower payment and interest rate on your purchase.

Inspection: A Must Do

Once you have found the home you want to purchase and you are ready to move in, perform an inspection on the house before you sign any final paperwork. The two areas of each home that should be inspected are the interior and exterior. Externally check any exposed concrete for cracks. Check the roof for leaks or uneven areas. Be sure to inspect the shingles up close to look for any damaged areas. Internally, check all plumbing by using everything from sinks and showers to the toilets to ensure proper operation. Also check the functionality of each light and electrical socket by plugging in a small appliance.