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Not too long ago, I bought my first home. It was very exciting. And we were quite happy that we were able to get the home mortgage loan that we wanted (boring 30-year fixed with a great interest rate), and that we did it in the middle of the subprime mortgage crash. We had a little extra hoop jumping because banks were tightening their lending standards, but it was worth it, and we ultimately passed muster.

First time homebuyers have plenty of questions, and there are plenty of pitfalls. However, if you do your homework beforehand, you can get a first mortgage that works for you — and one that you will be able to make payments on for years to come. Thrifty Scot offers some great “dos” and “don’ts” for first time homebuyers:

Things you should DO as first time homebuyers

The Thrifty Scot points out that you should get good financial advice first. And this is true. You should figure out if you can afford a home, and what wort of monthly payment you can afford. Remember that a monthly payment includes taxes and interest, as well as insurance and other costs that add on to the purchase price.

Other things that you should do include:

• Know what you want. This goes for the type of home mortgage loan you are looking for as well as the house.
• Get pre-qualified or pre-approved so that you have a better idea of what you will actually be able to buy.
• Pay down some of your debt to boost your debt-to-income ratio

DON’Ts for first time homebuyers

One of the main don’ts the Thrifty Scot lists is to avoid over-stretching yourself financially. In light of recent subprime events, this is excellent advice. You do not want to be in a position where you are “house poor” — too much of your income going to home payments. Choose a house you can afford, and one that won’t take more than 1/4 (1/3 at the absolute top) of your take-home income.

Other things to avoid:

• Don’t go with the first quote you receive. Get your credit score and income information, and talk to a few lenders who can give you a rough idea of what is possible for you.
• Avoid adjustable rate mortgages. Get a fixed rate. Under no circumstance should you get an interest-only loan in this economic climate.
• Don’t rush. Don’t be afraid to take the time you need to make sure that this is really what you want to do.

Tags: home loan, first time homebuyers, home mortgage loan, first mortgage,
second mortgage, mortgage blog, interest only loan