Your guide to the basics of buying your first home and tackling your new home checklist. Plus, find everything you need to know about hiring a real estate agent, purchasing homeowners insurance, calculating your home mortgage payments, and acclimating to your neighborhood.

Get the scoop on this Connecticut couple and their new 3-bedroom home!

Location:

Danbury, Connecticut
Setup: 3 bedrooms, 2.5 bathrooms
House Style: Contemporary
Square Footage: 1,814
Price Paid: $510,000
The Deal: $281/sq. ft.

How many places did you look at before finding the right one?
We looked in six different towns -- at close to 100 different houses.

How long were you looking?
It took us over a year to find and purchase the house. We made offers on three other houses, but they all ended up falling though.

What was the worst part about house-hunting?
It consumed our weekends. The first few weeks were fun, but then it became a chore. We got up every Saturday and Sunday morning and left to go find a house.

What was the best part?
We really got to see what we wanted or didn’t want in a house.

Was it hard to compromise and find a house you both loved?
Yes. After looking at 100 houses, there was only one other one that we both really liked. It happened to be one of the other three that fell through.

Do you have any advice for other Nesties who are house-hunting now?
Don’t settle. It took us over a year to find our house, and toward the end of the year, we were getting frustrated and started to think about settling for a house that wasn’t completely what we wanted. Then we came across our house and fell in love with it. Also, there will be frustrating times. We had to sell our condo in order to buy our house, and we had to move in with friends for about two months until we were able to move into our house. We’re grateful that they welcomed us to live in their home with them. In the end, it was worth it because we can’t picture ourselves in any of the other houses we looked at -- only ours!

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Imagine that you’re red-carpet-ready (with the income to back it up!) and can have your dream home of choice -- what would it be?

Take our quiz to find out!

Remember: You’ll be in the paparazzi’s eye, so location is everything!

Want to drool over more cool houses? Check out these amazing pads and daydream away…

Imagine opening the front door of your dream house. There’s the family room with a vaulted ceiling. Flattering light fills the -- yes! -- walk-in master closet. The kitchen has shiny new appliances. Then you step onto the patio and find a huge, legalese-infested mortgage growing there. Oh, that’s not part of your four-bedroom fantasy? What about the sub-prime lending crisis and bucking-bronco housing market? Don’t worry -- a little knowledge goes a long way to securing the right loan for you.

Plan Ahead

Want to buy a home in the next six months? Fill out a preapproval application with your chosen lender. You’ll discover any potential credit hassles and what size loan you can land (not that you should house hunt with that top-end figure in mind). Couples should file this paperwork together to provide a full financial picture -- and ensure they both become part of the buying process.
Bottom line: Get your info in order fast. The early bird gets the low-anxiety loan.

Think Short-Term

The popularity of 30- and 40-year mortgages is a recent trend, fueled by lenders who rake in extra moola off of endless interest payments. Example: A $100,000 loan at 7% interest paid off over 20 years incurs $86,072 in interest, while the same loan paid off over 30 years incurs -- yikes! -- $139,509 in interest. (Plus, a shorter mortgage typically scores you a lower interest rate.) But is it worth it?
Bottom line: True, payments on a shorter term will be a bit higher, but frankly, if you can’t pay off a house in two decades, hunt in a more modest neighborhood.

Get Fixed

Fixed-rate mortgages lock in current interest rates, keeping your monthly payments the same for the life of the loan. Adjustable-rate mortgages typically start with a lower rate, but after an initial period (1 to 10 years), payments can drop or rise with market conditions (swell if you like taking your paycheck to the racetrack).
Bottom line: Though mortgage rates have risen from recent historic lows, the average rate (hovering around 6.5%) is still a good enough deal -- a fixed-rate loan is probably the wisest choice if you qualify.

Pay More Now

If your down payment is less than 20% of the purchase price of your new home, you are required to obtain private mortgage insurance (PMI) to protect the lender in case you default. (The assumption is that since you’re not loaded, you’re a risk.) This “insurance� takes the form of an increased interest rate on the extra amount financed and can really add up over time. Wall Street whizzes may prefer to invest that down-payment cash -- a risky strategy unless you’re super-bullish on the market.
Bottom line: Strive for a down payment of 20%, even if that means settling for a home without that highly coveted wine cellar.

Be Sharp on Points

Points are a perplexing aspect of mortgage math. Put simply, a “point� is 1% of the loan amount paid up-front to the lender to “purchase� a lower interest rate. The more points you fork over to the lender, the lower your payments will be for the life of the loan. (Yeah, sounds sorta like a bribe to us too.) Unless you plan to own your new home for only a few years, paying points will help save you bucks in the long run.
Bottom line: Make sure your lender isn’t trying to stick you with a higher-than-average interest rate and multiple points.

Go for Broker...Maybe

Mortgage brokers are industry insiders who coordinate applications and shop around with multiple lenders to find good deals. (Many online lenders are actually brokers.)Of course, this service isn’t charity; a broker marks up the lender’s “wholesale� terms to the “retail� terms you see. But, if you have a relationship with a bank, that comfort level may outweigh any possible savings.
Bottom line: If you use a broker, choose an Upfront Mortgage Broker, who will disclose the fees and wholesale offers of lenders.

Nestpert Jack M. Guttentag of MtgProfessor.com

 How do we know if we're getting a good interest rate?

Buying a home and researching the best mortgage for your financial situation? You might assume the lowest rate is naturally the best. Not true! The teaser rates for adjustable-rate mortgages (or ARMs) and "interest-only" mortgages can suck you in with low payments in the beginning, which seems like a smart bet. But what they don't tell inexperienced buyers is that the rates can skyrocket once your "rate lock" wears off. If life doesn't go as planned and your salary doesn't move up as quickly as you expected or you lose your job, then that bump up in those monthly payments can lead to serious financial trauma. It's much better to seek out a 15- or 30-year fixed mortgage. Check out the latest rates at Bankrate.com and plug them into our handy mortgage calculator to play around with what your potential monthly payments may be.

Find out how this couple outsmarted a tough Northern California market to find their dream home.

Location: Lincoln, California (a suburb outside of Sacramento)
Setup: 3 bedrooms, 2 bathrooms
Style: Traditional single family home
Square Footage: 2,145
Price Paid: $276,000
The Deal: $129/sq. ft.

How long were you looking?
We began by looking online and going to open houses. We did that for about seven months. When we finally hired a real estate agent, it only took about six weeks to find the house of our dreams.

How many homes did you visit and look at?
We probably looked at about 30 houses and put in offers on three other homes before finding this one.

What was the hardest part about finding your new home?
In Northern California, the foreclosure market was heavily inundated with developers and investors. This meant that each house we put an offer on generally had multiple offers. In fact, the house that we bought had 13(!) backup offers on it.

What was the best part?
Having dinner at our dining room table with our family on the day we moved in. It was a long journey and definitely more emotional than either of us had anticipated. Sitting with our family knowing that the house was ours was such a wonderful, indescribable feeling.

Was it hard to compromise and find a home you both loved?
We have very similar taste with respect to layout, kitchen cabinets, space, and flooring, so it was easy to find a home that had the elements we agreed on. However, there were a few hiccups; my husband was focusing on the garage and backyard patio (where he could put a barbecue), and I was looking more carefully at the kitchen and master bedroom. Having said that, when we walked into this house, we both knew it was the perfect one for our future family.

Do you have any advice for Nesties who are still looking for their first home?
Consult a mortgage broker before purchasing. We began the whole process by finding someone that could give us good advice and help us to determine exactly what we wanted to spend. Simply getting a prequalification isn’t enough because it only tells you what you qualify for, not what kind of payments you can actually live with. Once we knew what we could realistically afford, it made the whole process less stressful.

What’s your favorite thing about your new home? What's unique about it?
We both love the white picket fence in the front yard.

Did you Just Move? Show off! Submit photos to be in The Nest Magazine Get in good with your neighbors Find decor ideas for your new space