First Time Homebuyer Guide

First-Time Homebuyer Guide

With our informative and easy to use First-Time Homebuyer guide, you’ll find resources, tips, and answers to common questions to help you make the right choices when beginning the journey toward homeownership.

Buying a first home in 14 steps

Buying your first home can be a scary proposition – especially in today’s housing market where inventory is low, inflation is high, and prices of homes see to be growing by the day.

Don’t panic.

There are things you can do that will get you prepared to buy a home and also give you a leg up on the competition when it comes time to actually make that down payment.

First

Check your credit score. It’s good to know where you are at right from the jump. That way, as you take the next steps, experts can tell you where you need to get to in order to qualify for the loans and mortgage you need to buy that first-home.
Talk to a mortgage broker or banker, even if you have been turned down in the past. They can tell you what you will qualify for now and what you will need to do to get the rest of the way.
Find out which programs you qualify in your state for help with mortgage rates, down payment assistance, and tax benefits. Every state has some programs in place, with some states trending toward allowing you to save money, tax-free, into a first-time homebuyers savings account, to come up with that down payment faster than ever before.

Taking into account all of your finances, determine what you can actually afford to spend? Potential homeowners should consider the down payment, all of your monthly payments in a given year, property taxes, and general upkeep costs when deciding what you can afford.
Consult a local REALTOR® and work with them to find the home that is right for you. Not only can a REALTOR® help you find your home, but they can also help you to negotiate the best deal possible in a competitive housing market.
Did you look for a home a few months back and gave up because you were constantly outbid, or never even had a chance to put in a bid because the home sold so quickly? Now is the time to try again. Many potential home buyers have stopped looking out of similar frustration. Take advantage of that and ramp up your pursuit because there may be less competition now in your housing market.
Determine your best financing option – do you want a standard mortgage, or is it better to have federally-backed home loans? Combine that with your state’s First-Time Homebuyer incentive programs while always keeping an eye out for comparative mortgage interest rates.

THEN

Consider moving to a different part of town or a different town altogether. If this is doable, it could be beneficial because even though home prices are up, they aren’t up everywhere, and you could find a steal waiting for you in a place you may have never thought to look originally.
Also, consider a home that needs work. Mortgages can include loans for remodeling that make a fixer-upper into a dream home in no time.
Be willing to compromise. Be clear ahead of time on what’s on your wish list, but break the wish list down into must haves, would like to haves, and not necessaries. This will help you get your foot in the door faster.

FINALLY

Make an offer – once you’ve found the right home, if you followed the steps above, you should be prepared to take the plunge.
Get a home inspection – It’s a cost, but it’s worth it. This will ensure that the home you are buying is safe and won’t incur unexpected expenses in the future.
Once the inspection is complete and you’ve come to an agreement with the seller, you will then close on the deal and sign all of the necessary paperwork. It typically takes a couple of days for your loan to be funded, but once the check is delivered to the seller, there is only one more step…
Move in and fall in love with your new home.

Questions to Ask Before Buying a Home

What type of home is best for you? Decide if you’re looking for a house, a condo, or a non-traditional home.

What features are you looking for in your home? Make sure to take into account everything you’re looking for in a home, such as size, number of bathrooms, outdoor space, appliances, and the school district and neighborhood.

How can you finance a home? Typically, homes are bought outright or financed over time with a mortgage.

What can you actually afford to spend? Potential homeowners should consider your down payment, all of your monthly payments, property taxes, and general upkeep costs when deciding what they can afford.

Who can help you with the home buying process? Consult your local REALTOR® and work with them to find the home that is right for you.

Understanding The Homebuying Process

Check your credit

Your credit score plays a huge part in your ability to secure a mortgage. Check your credit with your credit card company, online, or with a major credit bureau such as Equifax or Experian.

Figure out what you can afford

Crunch some numbers to decide how much you can afford to spend on a down payment, monthly payments, and expenses.

Choose a lender

Find the right lender for you and get pre-approved for a home loan.

Find a REALTOR®

Find an experienced REALTOR® to help you through this process. Not only can they help you to find dozens of homes in your budget that meet your requirements, but they can also help you to negotiate the best deal possible in a competitive housing market.

Find your dream home

Work with your REALTOR® to find the perfect home within your budget.

Determine your best financing option

Take your time to research all of your financing options such as standard mortgages, federally-backed home loans, your state’s financial incentives and programs for First-Time Homebuyers. Also be sure to keep an eye out for comparative mortgage interest rates.

Make an offer

Once you’ve found the right home and financing option, it’s time to take the plunge and make an offer to purchase your new home.

Obtain a home inspection

To ensure that the home is safe and won’t incur large unexpected expenses in the future, be sure to get a home inspection before closing on your new home.

Coordinate the paperwork and close the sale

Once the inspection is complete and you’ve come to an agreement with the seller, you will then close on the deal and sign all of the necessary paperwork. It typically takes a couple of days for your loan to be funded, but once the check is delivered to the seller, there is only one more step…

Move in!

You did it! Now kick your feet up and enjoy your new home.

Hurdles To Buying A Home

Of course, there are obstacles that may arise when buying a home, but no problem is insurmountable when given the right approach. Be sure to discuss these issues with your REALTOR® and/or loan officer if they are applicable to you. They will likely have insight into how others have addressed these obstacles.

Student debt burden

Many Americans are paying off high student loan debt, which makes it much harder to afford a home.

Declining single-family housing affordability

Single-family homes are rising in price, making them more difficult to afford for many families.

Insufficient single-family housing supply

While single-family homes are becoming more expensive, they’re also becoming harder to find on the market in most states.

About Fair Housing Laws

The Fair Housing Act (FHA) prohibits discrimination against anyone who is buying or
renting a home or securing financing for any housing. It prohibits discrimination
based on:

Race
Color
Disability
Family status
National origin
Religion
Gender

Know your rights. You can learn more by visiting our Fair Housing page. Fair Housing page.

Homeownership Benefits

There are dozens of incentives when it comes to homeownership such as tax deductions and first-time home buyers savings accounts. Some states offer tax-preferred savings accounts to make it more affordable for first-time homebuyers to purchase their first home. Be sure to check your state’s Department of Housing & Urban Development for First-Time Homebuyer Programs and Incentives for specifics and local policies.