Steps to Buying Your First New Home
Five steps to purchasing your first new-construction home
It pays to do your homework ahead of time, in order to make the new home buying process worry-free. You’ll want to get pre-approved by a mortgage lender, in order to get a feel for how much you’ll qualify for before you start looking at model homes. Take into consideration all of the various costs you’ll likely pay, including property taxes, insurance, landscaping costs, design center upgrades and so on.
If you’re in the market for a brand-new home, be sure to follow these 5 critical steps to ensure your experience goes smoothly:
Step 1: Get Pre-Qualified for a Mortgage
Before you start looking at any home, even a used home, you’re going to want to get pre-qualified for a mortgage by a mortgage broker or lender. Doing so will allow you to discover just how much house you can afford. A lender will look at things like your overall income, your debt-to-income ratio, and just how good your credit score is. Knowing how much house you can afford can really help you focus only on the homes and communities you can actually buy a home in. And, if you get this process started early, say 6-9 months prior to your target purchase date, you can work to correct any inaccuracies that pop up in your credit file.
Step 2: Target Only the Area You Want to Live In
Chances are, you are only willing to commute so far to work. Or, perhaps you want your children to attend a specific school. Knowing the areas that make sense in terms of distance to work, or distance to school can really help you focus only on the homes and communities that make sense for your family. Let’s stay, for example, your job is downtown, but you know you only want a 30-minute maximum commute. Open up a map and draw a radius no more than 30 miles out from your work. These exercises can help you avoid looking in areas that don’t make sense, geographically.
Step 3: Research Neighborhoods and New Home Builders in Those Neighborhoods
It’s easy to find new home builders online that are building new communities in the areas you want to live in. Compile a list of new homes that match your area and price ranges and begin looking at the amenities offered and the kinds of homes built there. Are they large enough for your family? Does the community itself offer amenities you find attractive? When you have some free time, drive the neighborhoods, walk the community itself and if possible, visit the model homes. Nothing replaces that in-person investigation process to help determine if a particular community is right for you.
Step 4: Do Your Comparisons to Find That Perfect Home
By now, you’ve probably narrowed your search down to a handful of different new home communities. Compare each one on the basis of price, amenities, competitive differentiators between the different builders, home warranties, and so on. You’ll want to decide now if you’ll need a move-in ready home (one that’s already built), or whether you can wait the 6-9 months for your new home to be built. Depending on when you become interested in a builder’s community, there may be a mix of move-in ready homes as well as the opportunity to pick a lot and have your home built specifically to your tastes. If you choose the latter, you’ll have more opportunities to customize your new home with design center upgrades.
Step 5: Close the Deal on Your New Home
With most builders, you’ll have the choice to use their in-house lenders, or you can go with your own, especially if you’re already pre-approved and you were able to lock-in a good mortgage rate. Either way, the builder will work with you to get your new home under contract. Be sure to read all of your paperwork carefully and ask your sales counselor what to expect during the construction process. Remember, a new construction home can often take several months to complete. If that timeline doesn’t work for you, ask your sales counselor if a new move-in ready home is available. In either case, a good builder will walk you through the process, and work closely with you during the construction phase. And, should anything go wrong following your move-in date, your warranty team will help get things corrected quickly.
For more homebuyer tips, check out our Essential Checklist for Homebuyers over on our blog!