During the pandemic, the demand for housing skyrocketed. As a result, more homes sold in 2020 than any other year since 2006.
If you want to purchase your first home, you may feel overwhelmed with the state of the market. But, this post will provide you with some excellent first time home buyer tips to make purchasing your first home more manageable!
1. Plan Ahead
Even if you aren’t quite ready to purchase your home, there are some practical steps you can take to prepare, including:
- Paying off debt and saving money
- Improving your credit score
- Researching lending options
- Deciding on your desired area
- Setting a budget
- Connecting with agents
Some individuals find it helpful to track their spending habits long before purchasing their first home. Doing so allows them to reduce their non-essential purchases, save more money, and set a reasonable budget for their home.
2. Save, Then Save Some More
Even if you save for years before purchasing your home, you shouldn’t use it all on your down payment. Remember, you will also have closing costs, which are usually up to five percent of your new home’s value.
Instead of spending all your savings, try to keep at least three to six months’ worth of income in your emergency fund. That way, you will have something to fall back on if there is an emergency.
3. Find the Right Lender and Get Pre-Approved for a Loan
If you’ve never secured a loan, you’ll want to shop around before making a decision. Try to compare a few different options, keeping in mind these factors:
- Rates
- Lender fees
- Loan terms
- Customer service
Once you find the right lender, ask for a preapproval letter. Having one shows that you are serious and may make your offer more appealing to sellers.
4. Know Your Options
Your first time buying a home, you are eligible for several incentive programs and special loan options. Usually, your lender will go over these options with you.
5. Research the Area
As a first time homebuyer, it’s easy to get caught up in the home’s features and forget about the neighborhood. Yet, this is one of the most important factors to consider, especially if you have a family. Be sure to research the following:
- Crime rates and demographics
- Traffic
- Community programs
- Schools
- Commute to work
- Walkability
While your realtor can help you access this information, it’s a great idea to drive or walk around the neighborhood before. Doing so allows you to decide whether it is the right fit for you and your family.
6. Take Your Time
After a long and grueling search, you may be tempted to rush the process when you find the perfect house. But, taking your time will help you find the best deal out there. You may find that an even better place in your price range comes along if you are patient.
7. Prepare Yourself for Closing
Closing can last over a month, which may be stressful for first-time buyers. Yet, researching the process ahead of time and working with an experienced realtor will help you overcome any roadblocks.
Use These First Time Home Buyer Tips
Buying a home for the first time can be a complicated and overwhelming process. But, with the help of these first-time home buyer tips, you can find the home of your dreams and get the best deal out there!
Did this post help you learn how to buy a home? If so, be sure to check out more of our real estate tips for the first-time homeowner!
