How to Buy a Newly Built House
Buying a new house can be an exciting prospect but there are a lot of things to consider. There is a distinct process that you need to go through when planning to buy a home. Buying a new home isn't that different from buying an older home but you need to be sure what your are getting and what you want. Does this Spark an idea?
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Instructions
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Determine what you can afford. You will need to have a down payment from 5 to 10 percent. Sometimes you can buy a house with no money down but it is always better to have some kind of down payment. If you can put least 20 percent down you can avoid PMI (personal mortgage insurance.) This is required if you put less than 20 percent down to protect the lender if you default before they recoup their investment. A rule of thumb is buy a house that doesn't cost more than three times your annual income.
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Go to your bank or a mortgage lender and get pre-approved for a loan. You will be approved depending on your credit and your monthly expenses. The bank won't want you to have a mortgage payment more than about 30 percent of your monthly income.
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Find houses that are new construction using a real estate agent. You go to an agent and tell them you are looking for new construction homes only or you can use their website. Most real estate websites will allow you to narrow your searches by new or used or by year built. Real estate agents will often show you houses you don't want to help you narrow down what you do want and to help you see advantages of other choices. If you want a newly built house be firm with the agent that you only want to look at new homes.
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Choose a builder. You can by a house that has already been built, known as a "spec" house or you can find a builder to build a home for you specifically. Go to a model home of the builder and choose what options you want.
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Make sure you get a good home. If the home is being built from the ground up or is partially built, hire an inspector to make sure the house is built according to code and to make sure it is being built with quality parts. Get a warranty from the builder that will cover any problems. Check on a builder's reputation.
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Resources
- Photo Credit http://www.sxc.hu
