10 Best Tips For The First Time Home Buyer

Buying your first house can be overwhelming.

It’s an easier process than one might think.

Having bought and sold multiple homes myself, I want to share my 10 best tips for the first time home buyer.

This is a sponsored post. All thoughts and opinions are 100% my own.

1: Get Debt-Free and Build a Nest Egg!

There’s no point in taking on the debt of a house if you have enough debt as is. Plus, you aren’t going to get the best interest rate if you owe money.

Pay off all credit card debts and loans you already have. This will strengthen your income to debt ratio, which is necessary for a home loan.

Whatever money you have left after all debts are paid, you should save! This little nest egg can help you avoid using your credit for emergencies!

The last thing you want to do after paying off your debts is to create new ones!

2: Define What You Can Afford

This is the biggest mistake most people make. It’s super easy to get in over your head, on a house you truly can’t afford with your current income.

First time home buyers can determine this by simple math.

• Add all your monthly take-home income
• Multiply your monthly income by 25%. This should be the maximum amount of your mortgage payment
• Take this information and apply it to a Mortage Calculator. This will help you decide what kind of down payment you’ll need per the home you can afford. A mortgage calculator will also give you an idea of interest rates. As well as help you add in necessary expenses, like HOA fees, home insurance, and property taxes.

3: Save For A Down Payment

Separate from your emergency nest egg fund, you should also save money that goes towards the down payment of your new home.

20% is a great goal to strive for. But many first time home buyers find this difficult.

Luckily, there are many programs available for first time home buyers. Talking to professionals, like The Associates Home Loan of Florida, can help.

The first time home buyer has availible loan programs like FHA, and the VA, to help with lower down payments.

4: Decide if you want to pay the closing costs, or negotiate!

Most first time home buyers are unaware of closing costs.

These include attorney fees, inspections fees, credit reports, appraisals, and homeowners insurance.

Generally speaking, closing costs average at 3-4% of the value of a home.

You can decide to either foot the bill of these yourself, or even add them into the negotiation of the home purchase. Many sellers will agree to cover closing costs in order to sell a home.

While these types of negotiations don’t always work, if you really don’t want to pay closing costs (or, can’t afford them) it never hurts to try to negotiate.

5: Get Pre-Approval

Most sellers will not take an offer without a pre-approval by a lender seriously. Neither will realtors.

Before you get excited about house hunting, you need to get with your lending agent and obtain a pre-approval letter. That is, after you have secured your finances the best ways possible.

6: Do Your Research!

What if you found the perfect house while browsing Zillow, and then find out it’s a horrible neighborhood after you’ve bought it?

You must do your research before you waste your time with showings!

A good realtor will listen to your needs. They should take into account of the part of town you want to live on, what schools are nearby, and what the level of crime is like.

It doesn’t do anyone any good to look at fantastic houses within your budget if you discover the area itself is less than desirable.

7: Be Proactive & Look For A Home Yourself

Realistically speaking, real estate agents are very busy people!

Don’t get discouraged if your agent isn’t very fast in finding homes for you. They have many clients, and can’t give 100% of their attention to just one.

However, you can be proactive in your house hunting, and create a list of homes you would like to schedule showings for.

Take your own independent research of neighborhoods, find houses for sell, and relay the info to your agent. They’ll appreciate the help, and it’s ok if you end up not liking anything you found.

Your agent will get an idea of the types of homes you’re interested in, and will be able to work from there.

8: Be Realistic About Houses You’re Looking At

It’s hard to find the perfect home, with no issues!

But it’s important to be realistic with your expectations, and potential.

Remember that minor cosmetic flaws, like an outdated kitchen, are very different than foundation problems. A lot of renovations can also be negotiated with sellers, in certain situations.

Be honest with yourself when looking at homes, and be open with your realtor on your thoughts.

9: Make an offer you’re comfortable with

First-time home buyers should never rush into making decisions.

Make sure when you put in an offer on a home, that its something you feel comfortable with. Your realtor can help you determine what a good offer is, how much buying power you may have, and what to expect back.

The last thing you and your agent want is buyer’s remorse. Don’t feel pressured to make a snap decision – there’s plenty of homes out there!

10: Gain Knowledge Of The Closing Process

Your real estate agent can give you a lot of insight on what to expect when closing on your dream home.

While your agent is responsible for scheduling inspections and contracts, it’s important you understand the process at hand. Especially if the inspectors find issues that might change your mind on going through with the deal, or returning to negotiations.

Typically closing on a home can take anywhere between 30-41 days. This is the most frustrating part for the first time home buyer. If you have any concerns at any time, never hesitate to reach out to your agent for help!