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Tips for First Time Homebuyers

Updated: Nov 2, 2023

Buying a home is one of the most critical choices you will make in life and one of the most expensive ones. Buying a home can be exciting and tiring as well, and if you’re not fully prepared, you may end up making mistakes that will cost you more than you can afford.

The process of buying a home can be complicated, with numerous things to take care of, such as mortgages, payments, insurance, and financial evaluations. To ensure that you don’t end up with buyer’s remorse, here are some tips to follow to sail through the process and close the deal while working within your budget:

1. Consider All Possible Costs

Buying a home can be costly. However, the worth you get depends on the choices you make. Ensure that you start saving as early as possible because there are several costs, such as:

The Down Payment: The mortgage lender and the type of mortgage you are offered determine your down payment cost. A standard loan provided to someone with good credit is about twenty percent, which adds up in the thousands.

Closing Costs: Closing costs are the fees you pay to finalize the offer and close the deal. The cost can range anywhere between three to five percent of the mortgage loan, but you can also try to negotiate with the seller to cover some of the closing costs.

Expenses After Moving In: Specific costs after moving in may pop up for repairs or maintenance, so make sure to include those in your savings as well.

2. Decide on a Budget

There may be many homes available on the market that have everything you ever wanted – a vibrant garden, an office space, or even a patio and swimming pool. However, you need to consider your budget before looking at such homes.

Calculate your monthly expenses, total income, and the total mortgage payment, including homeowner’s insurance and property taxes, to understand if it’s a home that you can afford.

You shouldn’t spend too much on a home if it’s going to burn through all your savings and leave you without any money for the basic monthly necessities, like food and clothing.

3. Don’t Forget About Your Credit Score

Check your current credit score and avoid doing anything to lower it. Here are some things to consider:

● Don’t spend too much on your credit cards, and don’t leave any bills unpaid.

Keep track of your credit score often, especially throughout the process, to avoid any unexpected changes that could hurt your loan offers.

● Avoid closing credit cards because it can lead to increased available credit, which may lower your score.

Get your credit reports from companies, such as Equifax or Experian, and remove any errors that could hurt your score.

4. Compare Mortgage Offers and Rates

If you go with the first mortgage lender you meet, it may cost you a lot of money. Compare at least four or five different lender’s fees, interest rates, and origination fees before making a choice. Moreover, make sure that you know about the various mortgage types and how they work. Here are your choices:

FHA Loans: The Federal Housing Administration offers these loans with low down payments of 3.5 percent.

VA Loans: Offered by the Department of Veteran Affairs, these loans need no down payment but are only for veteran military members.

USDA Loans: The U.S Department of Agriculture guarantees these loans and requires no down payment for rural home purchasers.

Standard Mortgages: These loans are for traditional buyers with a standard of a twenty percent down payment, but the government doesn’t guarantee them.

5. Get Your Hands on a Preapproval Letter

Visit a mortgage lender for a pre-approval letter before making an offer; they will verify your income, debts, and credit score before offering you a letter.

A pre-approval letter is offered by a mortgage lender when they agree to provide you with the mortgage amount according to the accepted conditions and terms.

While many buyers probably haven’t taken these steps first, the seller will appreciate that you are a serious buyer who has good credit since you have gotten pre-approval before making an offer.

6. Choose the Right Real Estate Agent

There are plenty of real estate agents that can help you through the home-buying process and make it a lot easier. The right one can locate homes that meet your needs within your budget and move along the negotiation during offers and closing processes.

However, instead of choosing a random agent, ask other homebuyers for referrals, conduct interviews, and ask them about their experience. A good real estate agent will have excellent knowledge about the real estate market and expertise on how to land you your dream home!

7. Choose the Right Home

Before going house hunting, consider your needs, budget, and your lifestyle. While a townhome can be affordable, it may mean less privacy because of shared walls.

Moreover, it may also be a problem if you have a larger family. There are plenty of options available, such as condos and duplexes, but you should weigh the pros and cons before making a choice.

8. Don’t Think About Skipping Open Houses

Open houses are an excellent way for you to look at the home you want and spot any issues you can later mention in your offer.

If you skip open houses, you won’t get a chance to see any problems with the house, and it may cost you a lot in the long run.

You can also partake in virtual 3D tours that catch every nook and cranny of the home, but nothing compares to a personal inspection of the property.

Do Your Research and Avail Help

There are plenty of tips available to help first-time home-buyers throughout the process; the above tips can help make the entire process easier.

Ensure that you also do your research and get all the help you require so that you can move into your new home in no time!

Have Questions? Ask Andrea Cashdollar!

I take my customer service very seriously and will respond within 24 hours. Your satisfaction is my number one priority and I look forward to being able to help you in any way that I can. Ask me anything below or feel free to reach out to me via email or phone. Talk soon!

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