Thinking of buying your first home? How exciting! It’s a big step for sure, but it can also be a scary one to take. After all, it’s new territory you’ll be venturing into, but hey — you’ve got this! Just follow these tips on how to buy a house for the first time, and you’ll be in your new home digging through your moving boxes to find the corkscrew before you know it!
How to Buy a House for the First Time
Tip #1: Make Sure You Have the Money!
The biggest thing every new homebuyer needs to ask themselves is whether they are financially ready. One reason buying a house is a big step is that it’s a big expense (and we’re not just talking about the purchase of the home itself)!
You should have enough saved for a 10-20% down payment without clearing out your bank account, and keep in mind that there will be additional costs, too, including closing costs, moving and furnishing expenses, home insurance, possible HOA fees, property taxes, utilities, maintenance, and repairs.
While some of these expenses are one time, upfront costs, others will be ongoing. A good rule of thumb is to make sure all the added expenses of buying a home come to no more than 25% of your monthly money coming in.
Tip #2: Keep Your Credit Score Strong
To qualify for a mortgage and get a good interest rate, it’s imperative that you maintain a strong credit score. Pay bills in full and on time, don’t open new lines of credit, and if at all possible, try not to make any big purchases that will need to be paid off in increments.
Tip #3: Find a Lender (and Rate!) You Like
It’s a good idea to shop around and compare rates of lenders before deciding on where to get your mortgage. Ask about mortgage options and the type of loan (Conventional, FHA, USDA, or VA) and rate (fixed or adjustable) that makes the most sense for you.
Tip #4: Look into First-Time Buyer Assistant Programs
Be sure to ask your lender if you qualify for any first-time buyer assistance programs which can help save you money by covering a portion of your down payment or closing costs.
Tip #5: Get Pre-Approved
Before you even start house hunting, crunch some numbers with your mortgage lender to determine what you can afford and go through the process of getting pre-approved for financing. This will help you set a budget, as well as give sellers confidence that you are a credible buyer and can actually go through with a deal!
Tip #6: Decide (But Keep an Open Mind) on Location and Type of Home
As they say in real estate, “location, location, location.” The fact is, where you live is just as important as what you live in, and when determining that, there is much to consider. When choosing a neighborhood, think about your commute to work, the schools in the area, and your lifestyle needs — now and in the future.
Lifestyle can also influence the type of house you choose, but it’s important not to get locked in on any one particular location or house. Sometimes, you may have to venture out of your target neighborhood to find what you’re looking for, and you may even surprise yourself and fall for a brick ranch rather than a two-story with siding. The key is to have in mind what you want, but keep your mind open to other possibilities!
Tip # 7: Prioritize What You Must Have vs. What You’d Like to Have
We hate to break it to you, but rarely do people find a house that checks off every one of their boxes. That’s why it’s good to prioritize your list of what you’re looking for into must haves, nice to haves, willing to compromise on, and absolute deal breakers. Who knows, maybe you’ll find a house that has it all, but if you do need to make some sacrifices, at least you’ll be able to weigh what matters to you most.
Tip #8: Enlist the Help of a Local Real Estate Agent
A real estate agent is a first-time homebuyer’s best friend! As an expert in the housing market, a realtor can be a huge help in finding homes that meet your criteria and your budget, negotiating prices and terms, scheduling house tours, handling paperwork, providing advice, and guiding you through the complicated purchasing process. A good real estate agent will act as your advocate and always keep your best interests in mind.
Tip #9: Don’t Skip the Inspection!
It’s easy to get super excited if you find a house you love and of course you want to move in ASAP, but before you start packing, hire a house inspector to make sure there aren’t any issues hiding for you to find out and deal with later.
An inspection can uncover needed repairs or problems with the house that should be addressed, and if that’s the case, you may be able to negotiate the price or request that the seller take care of the issues prior to the exchange of the property. In a hot housing market, it’s easy for homebuyers to feel pressured into skipping an inspection, but remember — if someone wants you to skip the inspection to win the bid, there’s probably a reason.
Tip #10: Know What to Expect at the Closing
You’re so close to being handed the keys to your very first home, but first you have to get through the closing! You will need to sign a lot of paperwork, and be ready to pay for your portion of closing costs. This is especially a time when having a real estate agent comes in handy! Your agent will be there for you to answer any questions you have and explain anything you don’t understand. It might take some time, and you might get a hand cramp, but eventually you will have your new home’s keys in your possession. Congratulations! You’re officially a first-time homebuyer!
Bonus First-Time Homebuyer Tip: BlueWest Properties is here for you!
Buying a home for the first time can be a stressful process, but it doesn’t have to be. With the right realtor, you can find the home that’s right for you, move seamlessly through negotiations, and close on a schedule that works for your timeline. For expert help from local realtors, contact BlueWest Properties today. We’ll help you find your first home, sweet home in no time!