First Time Home Buyer Tips

Being a first time home buyer can put you in a scary and confusing position. Also, because it is so exciting to imagine yourself about to own your own home, you can get some "irrational exuberance" flowing through you and this can lead to making bad decisions.

So hopefully these first time home buyer tips will help you keep your head during this whole process.

First Tip: Buying a Home Now or Wait

On the one hand, if your current rental living arrangement isn't driving you crazy and you aren't so sure that you can get a standard conforming loan because you don't have at least 20% of the purchase price to put down, then it could be wise for you to wait.

Second Tip: Save for Down Payment

This will allow you time to save for that 20% down payment and see if the prices drop. Then you will be ready to go for your house. You also don't want to buy a house at one price and then have its value drop significantly--you have just lost a lot of money when that happens.

Third Tip: Waiting too Long When Buying A Home

But on the other hand there are dangers with this conservative approach, too. Why do retailers run sales? They put products on sale to get more people into their store. When house prices drop, houses are on sale. Now, there are more people who can afford "your" house than there were before.

These people are all in direct competition with you. You don't have as much of a chance of getting the very house you wanted as you did before when prices were higher. There's also the fact that as housing prices go down, interest rates go up. Ugh! This is because when prices are higher, lenders lower rates to attract more buyers.

But when prices drop, lenders raise rates to use competition to get the most qualified borrowers. And the danger here is that interest rates could rise enough, so that you would actually have to pay more money per month on the loan than you would have if you bought at the higher price with a lower interest rate.

Fourth Tip: Check Your Credit

Another basic of the first time home buyer tips has to do with credit. If you are sure that your credit is not top of the line, you might want to wait and get your credit rating up.

You could be turned down for the loan you need or be forced into a high interest rate otherwise. So take the time to check your credit scores. .

Fifth Tip: Get Pre-Qualified for a Mortgage

If you aren't really sure how much house you can buy, you can get pre-qualified first to see what you could possibly get today. Lenders are happy to pre-qualify you because they hope to earn your business. By doing this it can help you make a decision whether to wait in buying a house or jump into it now.

You can see the juggling act here. So there is no cut and dry answer to whether the timing is good now or later. You'll have to take a look at your personal circumstances and decide.

More First Time Home Buyer Tips

• If you don't have 20% to put down, look into getting state or federal grant monies that help with first time home buyer down payments. Also look into seller closing cost contributions and federal loan programs like FHA (if the house's price is low enough; states and counties vary). .

• Stay away from balloon loans--they are major trouble for most people. These are tempting because they may offer low monthly payments and low interest rates in the beginning. But stay away from them. They are not the type of loans a first time house buyer should consider. It takes someone who is really watching the market to benefit from these type of loans.

Use these first time home buyer tips to make sure you do things right with your first home purchase.

If you are looking for more first time home buyer tips, have a question is a cool place to look. If you cannot find the answers your looking for, then this is the place to ask also. Go ahead...pick my brain!

Perhaps you are ready to get started by wonder which loan program would be right for you. First Time Home Buyer Programs explains the different options making it easier for you to decide.

Are you interested in the FHA product? Best FHA Home Loans explains the various products so you can pick the perfect one for you.

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