Purchasing your first home is both an exciting and daunting experience for many.

Often parents and other property owners will try and give advice on the best path to take. However personal opinions aside the New York Times has published a “7 New Rules for the First-Time Home Buyer” article to give advice to newbies.

Of course the Ann Arbor Real Estate market, like many others across the nation has seen a rise in the number of first time homebuyers thanks in part to the $8,000 tax credit as well as the more affordable prices and low fixed rate mortgages options available.

In short the 7 new rules are:

1. THE BASICS – Put 20% down - not only will this protect you from market price fluctuations but it will also mean that you may have a smaller mortgage than expected resulting in a lower payment – and you may not need mortgage insurance. Use a realistic monthly income figure when working out how much of a payment you can afford and do not exceed 35% of that figure. Also a fixed rate loan is suggested so that your payment does not change.

2.  INCOME – If you have  stable job and career path you can generally predict your income level over the coming year, this means forgetting about making huge gains in the value of your property and continually cashing out that money through refinances. Those first time home buyers in their 20′s and 30′s will see their incomes rise much faster than those older buyers.

3. THE UNEXPECTED – Plan for the unknown! Think, could you manage this mortgage and house if you had a child and took time off work or if you are a couple, if one of you lost your job. Factor in potential long term unemployment or a change in careers midlife.

4. MAINTAINING A HOME – Homes cost money to maintain! Often buyers play down the level of expense needed to keep a home, for instance most homeowners pay 3.6% of the original purchase price annually for maintenance and 4.5% if it’s an older home.

5. THE DREAM OR THE FUNCTIONAL – It has been suggested that buyers should buy what they want (that elusive dream home) or a lower priced starter home and that the middle ground should be avoided. This is all in the aim of making the owners happy. If you can’t afford the dream home just yet then it is suggested to wait a little longer until you can.

6.  TIME IN THE HOUSE – Constantly moving incurs expense, staying in the home you buy longer is a great tip.

7. “THE 8 HR RULE” – If you take on  a mortgage that keeps you awake all night and you sacrafice the 8 hours sleep that is recommended then that is a problem. As a buyer you should purchase a home you like at a price you are comfortable with.

So, if you are looking to purchase then please – Click here to search Ann Arbor Real Estate using our complimentary Ann Arbor Real Estate MLS Search service. Alternatively please contact Kathy Toth and the team if you need more specific assistance in your Ann Arbor Real Estate needs.

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Kathy Toth & Team: Ann Arbor Area Real Estate Experts

www.KathyToth.com

Keller Williams Realty

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