Helpful Guide for First-Time Homebuyers

Buying a home for the first time is a big deal. It’s an important decision, so you don’t want to walk into it unprepared. There are several things to consider before making the commitment. The process doesn’t have to be stressful, though. There are a few key steps that can help make it easier. Let’s take a look at what you should know about buying a home.

Make Sure Your Timing is Right

You don’t want to rush into your first home purchase. It shouldn’t be something you feel like you have to tick off a to-do list the instant you have a stable career and income. In fact, that may be all the more reason to wait so that you can ensure you’ve saved up a solid down payment to get the home you really want. If the timing is right to purchase a home, then the next steps in this guide can help take the stress out of the process. Just remember, you’re not on a clock. You can purchase a home at any time, so make sure this is the right time.

Assess Your Finances

Before you start looking at houses, you’ll want to figure out how you plan to pay for the house you ultimately end up choosing. There’s a mortgage and down payment to consider. Depending on the type of mortgage you select, you could qualify for anything from no down payment to 20% down. The more you can pay upfront, the less you are going to have to pay on your mortgage in the long run.

You’ll also want to consider your income and any debt you’re carrying at the moment. You’re going to be paying for your mortgage for many years to come, so you’ll also want to keep in mind expenses like car payments, insurance, and taxes.

Plan a Budget

Once you’ve assessed your finances, you’ll want to plan a long-term budget. You can use a mortgage calculator to help figure out how much you can expect to pay each month. Then to plan your budget, factor in your other expenses, including:

You don’t want to overextend yourself when it comes to buying a house. Plan your budget now, so you won’t be surprised by how much you need to pay monthly.

Check Your Credit

Before you head to a bank or lender to apply for a mortgage, you can get a free credit report from several websites. If your credit isn’t as good as you’d like, there are few things that may help improve it. You may want to avoid opening new credit cards while you’re in the process of getting a mortgage, and it can help to pay down as many bills as you can before you apply for a mortgage. Less debt and regular payments can help improve your credit score, showing banks and lenders that you’re a good risk for a mortgage.

Compare Mortgage Rates and Types

There’s more than one type of loan that you may qualify for when it comes time to buy your first home. You can request loan estimates from multiple lenders to compare costs and interest rates. Beyond conventional loans, you can also look into other types of loans that may apply to your situation, including:

The more you know about various loan options, the more confident you’ll be moving forward.

Find the Right Home for You

Now that you’ve considered your finances and potential mortgage options, you can confidently start house hunting. You may want to do this on your own or you may want to hire a real estate agent to help you with the process. If you’re interested in working with a real estate agent, you’ll want to do your homework to find the right agent.

If you have friends or family who’ve recently purchased a home, they may be able to recommend a real estate agent. You can meet with several before choosing anyone. Ask them questions like how long they’ve been in the business, how they’ll be able to help you find the right house, and what else they bring to the table that makes them a standout real estate agent. This is a really big purchase, so you’ll want to make you choose a real estate agent who makes you feel comfortable and confident.

When you’re out looking at a house, you’ll want to assess everything about the property—inside and out. Is the house new and in excellent condition, or is it older and in need of some work? Is it the right neighborhood for you? Is it near the amenities that are important to you? Are you looking at a detached home or will you be sharing a wall with a neighbor in a townhouse? Will there be HOA fees?

If the home has a basement, check for issues that may be related to the foundation or flooding. Check the water heater and furnace to find out how old they are and what condition they’re in. Likewise, you’ll want to check the gutters, the windows, and the roof to see what condition they’re in.

Hit as many open houses as you can. Looking at pictures on a website is a great start but remember that nothing can replace seeing a house in person. You’ll get to see all the nooks and crannies that didn’t make it into the photos. An open house is an opportunity to get a feel for the quality of the house and any problems that it may have.

Don’t Forget a Home Inspection

If you’ve found a house that you like, you’re going to want to pay to have a home inspection. This will give you an in-depth inspection of the structure and the mechanics of the house. Depending on the type of inspection you get, your inspector can check for a variety of issues, including mold, structural damage, water damage, and pests.

Get Home Insurance

Once you’re confident that you’ve found the right place and completed an inspection, you’ll want to invest in enough home insurance to cover the cost of fixing your home if something catastrophic were to happen to it. This is another thing that you’re going to want to shop around for before committing because there are plenty of providers and options depending on your needs. If you’re getting a mortgage, then your lender is going to require that you have home insurance before the deal is done.

The Bottom Line

Few things in life are quite as exciting as buying a home for the first time. It can be both overwhelming and exhilarating. But you’ll want to make a proper plan instead of getting caught up in the moment. It’s very easy to fall in love with a house the moment you see it and overlook important details. You’ll want to assess your finances and get a home inspection before committing, so you can feel confident in your purchase.