There is nothing quite like purchasing your first home! Excitement and nerves battle over your first big buy. It’s not surprising, dreaming about the type of flooring or what neighborhood you want to be in versus weighing mortgages and how much down payment can be overwhelming. It is one of the biggest investments of your life, so as you navigate the real estate waters, here are 10 tips to keep you moving forward.
1. Stay realistic.
Remember, this is your first home, and it is often referred to as your starter home. You may not tick off everything on your wish list, but that is okay. Focus on your non-negotiables.
2. Research neighborhoods.
Knowing the areas of town you love matters. Consider factors like: does a short commute matter? Do you want walkability? Do you need green space or parks? Go and visit areas of interest and check out the average cost of a home in that area.
3. Check your credit score.
There are many places you can check your credit for no cost. Review it and see where your credit stands. The type of loan and the rates you can get will be impacted by your credit score. If there are outstanding issues, work to resolve them first.
4. Start saving!
Begin a separate savings account and start squirrelling away money for your down payment. The more down payment you pay, the better off you will be in the long term of your loan.
5. Find a real estate agent.
There are many real estate agents in any given market, but finding an agent who cares about and puts the client first matters. You don’t want to feel pressured by your agent. I adopt a low stress, no-sales-pressure approach with a goal of every client leaving 100% satisfied.
6. Get pre-approved for a loan.
Research mortgages, loans, and banks, and once you decide where you want to get your loan from, be sure to get pre-approved and understand your comfortability with monthly payments, HOA fees, etc.
7. State and local assistance.
There are options for assistance for the first-time home buyer. Things like tax credits or a smaller down payment. Use these incentives to your advantage.
8. Save for than your down payment.
Buying a house is expensive. And it’s not just the down payment. Remember, you also need to be prepared to pay for your closing costs. Also, if you are moving from a one-bedroom apartment to a three-bedroom home, you will likely need additional furniture. Or other supplies like flooring or paint for small DIY projects.
9. What type of home?
As a first-time home buyer, consider your home options: town home, single family home, condos, etc. If you hate yard work, you may want to steer clear of the single-family home. If you are a young family, you probably want the freedom of a backyard. Each buyer is unique, and you need to consider what will be the best for your future happiness with your home.
Unless you have a trust fund or won the lottery, you are going to have a budget for your first home. Most likely, you are not going to tick every part of your wish list and be budget friendly. Be ready to compromise and weigh what you can change or can’t (cracked foundation versus paint colors!).