Tips for First-time Homebuyers

beige concrete house

Homebuying is a sign of independence and is one of the major decisions in every person’s life. But buying a home for the first time can be both exciting and overwhelming, which is why homebuyers should be educated about the process before embarking on their real estate journey.

According to a study, only 41% of first-time homebuyers felt they were well prepared for the homebuying process. Same study revealed that 55% felt they wished they had an independent advocate to coach them through the process. 

In the next couple of weeks, you might see a lot of available homes flying off the market within the median range. With this kind of real estate trend, don’t be tempted to make an impulsive purchase that could hurt your financial goals. Do it the right way, the first-time, so you buy a home that you love and that doesn’t hurt your future money goals.

Here are a few tips for first-time homebuyers so their first home is a blessing, not a burden.

Make sure to be debt-free before buying a house.

Let’s accept the fact. Even if your monthly house payment is similar or lower than your current monthly rent amount; owning a home is still much more expensive than renting, because when you own a home, you’re the one responsible for all the maintenance and upkeep costs. So before thinking about buying your first home, make sure you’re debt-free and have an emergency fund good for three to six months.

Choose a house you can afford.

Don’t get too emotionally attached to your dream house. Check your monthly budget first and determine how much house you can afford. Make sure your monthly housing costs will not exceed 25% of your monthly take-home pay. Also, don’t forget to include estimates of the property taxes and homeowner’s insurance.

You may also consider home for sale in your price range. Recent data shows most buyers either found the home they purchased online (50%) or through a real estate agent (28%). Doing a research using both is an advantage for first-time home buyers.

Attend open house events.

To find the most affordable house in the best neighborhood, attending open houses is a good option. It is a great opportunity to walk through a house that's for sale at the time most comfortable for you. It is also a chance to find the property to want to buy at the bottom of the price range in a good neighborhood, thus giving you more room to build home value.

Save for a down payment.

If you can’t pay the house in cash or you can’t save up to pay cash for the total price of a house, then save at least for a down payment of 20% or more. That way, you no longer have to pay for private mortgage insurance (PMI), which protects the mortgage company in case you can’t make your payments and end up in foreclosure.

Get preapproved for a loan.

When you have enough cash saved for your home’s down payment, you’re ready to handle the other 80% by talking to a mortgage lender.

Before starting your home search, get pre-qualified for a loan and take the extra time to get a preapproval letter.

Your first home is one of the biggest purchases of your life and you don’t want to end messing things up. Doing the right thing the first time will take the weight off your shoulders.

 

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