First time home buyers are often overwhelmed by the number of steps involved in buying a home. This process includes finding the right property, securing financing, making an offer, getting a home inspection and closing on the purchase. First-time home buyers also may not be aware of special advantages they can enjoy in order to help them buy a home, such as federal tax breaks and local first-time buyer programs.
Before you get started on your search, take a look at your financial health and work with a real estate agent to figure out what you can afford as a buyer. It’s also a good idea to save money to cover your down payment and closing costs.
Then you’ll want to talk to multiple lenders to find the best mortgage for you. Be sure to factor in lender fees, which can add up quickly — even with low interest rates. If you are debt-free, consider a lender that doesn’t use a credit score for underwriting and does manual underwriting instead.
You’ll want to be realistic in assessing your tips for first time home buyers needs, particularly if you’re buying in a competitive market. Be willing to walk away if you can’t secure the loan you need or if an inspection turns up expensive issues that make the property unsuitable. “The worst thing you can do is settle for a house that’s not perfect or that doesn’t meet your long-term goals,” DiBugnara says.
Don’t forget to consider any other expenses that come with homeownership, such as maintenance and insurance. “You’ll want to think about the overall cost of owning a home and compare that to what you’re currently paying for rent,” she says.
Finally, if you’re planning to start or grow a family in the near future, it’s important to carefully assess what kind of school districts are available in your area and how that might affect your children’s educational opportunities. “You want to be close to a good school district,” DiBugnara says.
Another tip is to tour homes in person as much as possible, she says. Many properties now have virtual tours and 3-D walkthroughs online, but it’s a lot better to see a home in person than relying on photos and video clips. Take notes after each visit, and don’t be afraid to walk away if you’re not impressed.
It’s also smart to visit a home at different times of day and to spend some time at the property in the evenings, when it will be quieter and more peaceful. Then you’ll have a better sense of what it will be like living there at night, and during bad weather.