Top 5 First-Time Home Buyer Tips

Purchasing a house is a huge milestone in life, and it can be a challenging journey to navigate. It can be even harder to find or afford your dream home in the current market where demand is high, choices are often scarce, and sellers frequently have the advantage.  

Set yourself up for success as a homeowner by planning and preparing before you even start your search for the perfect place! To purchase your first property like a pro, follow these five tips.

Tip #1: Saving up for your down payment starts now

A down payment is a sum you pay upfront to make a large purchase, like a car or a home, and it can be a massive obstacle for potential buyers. The average first-time homebuyer puts down 20% of the purchase price as a deposit, so it is crucial to get a head start by saving up funds for your down payment (plus other costs which will arise in the home-buying process).

Saving up enough money can take some time, but here are a few tips to help you reach your goal sooner rather than later:

  •  Set up a savings account specifically for your down payment: Make it easy on yourself and set up automatic direct deposit for this account. Do not use these funds for anything other than your down payment.
  • Cut your costs: Look over your expenses and consider what you can eliminate. Then, take the cash you would have spent and put it in your down payment savings account.
  • Tackle your debt: Get started with your highest interest rate card. Once you have paid the entire balance, close the card, and move on to the next one. At the very least, transfer your credit card balances to the card with the lowest interest rate.
  • Bring in additional income: Could you take on a second job? Even if it is just temporary, earnings from another job can help you skyrocket your down payment savings.

Tip #2: Get an accurate mortgage estimate

Before you start scrolling through Zillow or eyeing any houses with "for sale" signs in the yard, find out exactly how much home you can afford to buy. 

It is easy to figure out how much you can borrow by checking online home affordability calculators or visiting your local lender. Online mortgage calculators and lenders will consider factors like your location, marital status, annual pre-tax income, anticipated down payment, and your other debt payments. 

Tip #3: Check your credit report

When it comes to a significant purchase like a home, knowing your credit score is not enough. You also need to check your credit reports, which record your history of managing and repaying debt. Think of it as a sort of report card banks and other companies examine before lending to you.

You are entitled to a free copy of your credit report every 12 months from each of the three nationwide credit reporting companies: Equifax, TransUnion, and Experian. If your credit score and report are lacking, you may want to take some time to work on your credit before trying to purchase a home.

Tip #4: Research what type of property would work for you

Finding the right home is not a one-size-fits-all process. Although most buyers are on the hunt for single-family homes, it pays to look at other options, too.

While you might think you would love a sprawling estate with lots of space for gardening, after several weekends spent mowing the lawn and weeding the flowerbeds, you may change your mind! 

Each type of property comes with its own pros and cons. For example, condos and townhomes might have less square footage, but they also require less maintenance. 

A home is a considerable investment, and you will likely be living in it for a while. Be sure you take time to consider what your needs might look like in the future, as well as the present.

Tip #5: Consider your insurance and closing costs

Another reason it pays for first-time homebuyers to start saving early for this significant purchase? As a buyer, you are responsible for more than just the purchase price when buying a home. 

You will also pay closing costs, including property taxes, title insurance, transfer taxes, HOA fees, escrow fees, and legal fees. When saving up for your down payment, it is essential to keep these expenses in mind, too.

Knowledge is power for first-time homebuyers

Becoming a homeowner is a huge achievement, and at Simply we are here with resources to help that process be as smooth as possible. Visit our blog for real estate tips to help you find and buy the perfect property. 

Whenever you are ready to transition from that first house, or if you need to relocate sooner rather than later, we can help! At Simply, we believe selling your home off the market should be easy, so we make as-is cash offers for your home and close on your timeline.

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