Buying a house for the first time can be challenging. There are plenty of tasks to do, steps to follow, and a boat-load of requirements to meet. You’re anxious about making a costly mistake? Well, that’s perfectly normal. And absolutely avoidable. So to help you out, here Rogers’ Moving Services’ tips for first-time home buyers.
It’s time to demystify the process, so you can get the most out of your purchase. In this post, we’ll tackle tips for first-time home buyers, some considerations before buying, and what you can expect from the buying process itself.
Is there an advantage for first-time home buyers?
Buying your first house is a key part of the American dream. But after knowing that you’re going to have some advantages, maybe you’re more eager than ever to get your house-buying journey down the road.
First-time home buyers have access to state programs, tax breaks, and federally backed loans if you don’t have the usual minimum down payment (ideally 20% of the purchase price for conventional loans).
You can even qualify as a first-time buyer even if you aren’t a novice at this sort of venture.
According to the US Department of Housing and Urban Development (HUD), a first-time homebuyer is someone who falls under the following conditions:
- Anyone who hasn’t owned a principal residence for 3 years. If you have a home but your spouse doesn’t, then you can purchase a place together as first-time home buyers.
- Single parents who’ve only owned a home with a former spouse while they were married.
- Displaced homemaker who’s only ever owned a house with a spouse.
- Any individual who’s only owned a principal residence that isn’t permanently affixed to a permanent foundation in accordance with applicable regulations.
- Anyone who’s owned property that wasn’t in compliance with local, state, or model building codes.
Tips for First-time Home Buyers
You’re excited to own a home, yes. But don’t be too quick to pack a truck full of your belongings and hightail it to your new house. Get some advice from expert home movers, and consider some things carefully before you do.
The first step to buying your new home is to determine long-term goals, and how home ownership fits in with those goals. Buying homes is also a good investment venture. Narrowing down the home-ownership goals can help point you in the right direction.
#1 Audit your finances
How’s your financial health?
Before browsing through pages and pages of online listings or falling too madly in love with your dream home, make sure you do some financial auditing first. You must be prepared for both the purchase and the ongoing expense that comes with owning a home.
The outcome of your financial audit will let you know whether or not you’re ready for taking this big step, or if you need to do some extra preparations.
- Check your savings: Don’t consider buying a house before you’ve set up an emergency savings account — with at least 3-6 months of living expenses. Buying a home will entail considerable upfront costs — including down payment and closing costs. Lenders will require it, so you need to put money away not just for those costs, but also for any emergency funds.
- Review your spending: Know how much you’re spending every month, and where it’s going. Account for everything (utilities, food, car maintenance, payments, student debt, clothing, kids’ activities, retirement savings, regular savings, miscellaneous items, etc.)
- Check your credit: To qualify for a home loan, you’re going to need good credit, a history of paying your bills on time, and a maximum debt-to-income (DTI) ratio of 43%.
#2 Find a house that suits your needs
You’ll encounter a number of options when you’re purchasing a residential property. From traditional single-family homes, to a duplex, townhouse, condo, etc. Each option you look at has its own pros and cons, depending on your homeownership goals.
So you must decide which type of property would help you reach those goals. Yes, you can save on the purchase price by going with fixer-upper, but be warned that you’ll be spending a lot of time, sweat, equity, and money to turn that fixer-upper into a dream home.
It can be a lot more than what you’ve bargained for.
#3 Look for mortgage prices you qualify for
Before you go house shopping, or looking for the right movers to help you, it’s important to get an idea of how much a lender can give you when you’re about to purchase your first home.
You might think you can afford a $300,000 home, but lenders might think you’re only good for $200,000 based on some factors, like how much debt you’ve got, or your monthly income. Or even how long you’ve been at your current job.
Make sure that you’re pre-approved for getting a loan before placing an offer on a home.
#4 Think of the features you want the home to have
It’s good to retain some flexibility. But you’re making one of the biggest purchases of your life, and you deserve to have that purchase fit both your wants and needs for as closely as possible.
The list must include basic desires, like the size of the house and the neighborhood. From something as big as that to smaller details like the size and the layout of the bathroom, or to a kitchen full of durable appliances.
#5 Find a real estate agent
Who is going to help you find a home and guide you through your first-time buying a home? This is one of the most important tips for first-time home buyers.
Look for a real estate agent who can help you locate homes that meet your needs and are in your price range, and then meet with you to view some homes. After choosing a home to buy, real estate professionals can help you negotiate through the entire purchase process.
That includes making offers, getting loans, and completing all sorts of paperwork. Hire the right ones, and you can protect yourself from pitfalls.
This guide and these tips for first-time home buyers can help you on the path to filling in any gaps in your home-buying knowledge.
Keep in mind that the more you educate yourself about the process before buying a home, the less stressful it would be for you and everyone else. The more likely you’ll be able to get the house you want for a price that you can afford.