Advice for a First-Time Home Buyer: Tips to Follow

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Buying a house isn’t as simple as shopping for clothes or any other commonplace items. And while we all know that for a fact, it’s hard to apply, especially for first-time homebuyers.

Our housing specialists compiled a list of must-know tips for you to note so your home buying process will be a lot easier.

Remember: HOME for Your New Home

lady playing with her dog

To make things easier to retain, we’ve made use of the acronym “HOME”:

Under these headings are also more sub-tips, so make sure to go through the following sections Keep in mind that these are not particularly subsequent in order. The best way to go about them is to fit them with your needs, situation, and circumstance.

Home-Planning

As the word entails, planning is not about choosing specific houses right off the bat. Understanding what type of houses by research or by consulting real estate agents helps you get an idea what type of home you want to purchase.

In addition, when we say planning, we’re referring to the knowing-what-kind-of-home you want. Or in other words, what’s your dream home?

writing on a planner

This advice for first-time home buyers entails setting your negotiables and non-negotiables. This will make it easier for you to know how much money to save when to say yes and no, and the other considerations that will follow.

Overbudget

By “overbudget,” our team means to over-budget: always go beyond what’s “enough.”

As much as possible, make sure you do not scrape from your emergency fund, retirement savings, monthly payments, and insurance. If you have to, you’re not financially ready to buy a house yet.

documents calculator and dollar bank notes on table

Overbudgeting is also an excellent way to maintain financial health, so the additional costs won’t easily dent your budget. Believe us when we say that there will be a lot of hidden costs.

The purchase price of your house is not the be-all-end-all. You have to consider these:

These are on top of your other expenses outside of the home search. We’re talking about tens of thousands per month. That’s why a lot of home buyers start to save money as early as possible.

two person talking

Consult a Certified Financial Planner

The good news is, you’re not alone in this process. Although financial planners will cost more, they are trusted guides to help you budget your money without ruining your long-term financial goals.

There’s also such a thing as Consumer Financial Protection Bureau, a US government agency, that can protect you should you encounter scammers or go through conflicts (i.e., with your credit report, complaints about a mortgage broker, etc.).

Mortgage and Loans

First-time buyers ignore tons of mortgage programs that can help you with your costs. Mortgage lenders, brokers, and loan programs are standard and everywhere.

But it’s understandable why: first-time home buyers want to avoid mortgage insurance fees, mortgage expenses, and all other additional costs that can bring you to a money pit spiral. This scenario is entirely possible – so we’re not discrediting the fear.

realtor talking to clients

Here are some trusted loan programs you can check out:

The Mortgage Process: A Quick Overview

While this is not exactly an article about mortgages, our team wants to give you a quick run-through of the necessary steps and important points you need to consider now.

1. Checking of Financial Status, History, and Credit Score

Any mortgage lender would want to know your financial history first. From your bank statements and credit score, they want to see if you’re capable and responsible for paying your dues.

hands on laptop

Here are some additional notes to keep in mind:

2. Mortgage Pre-Approval

After performing a background check, you’re now subject to a mortgage preapproval. You’re not yet approved, but you’re qualified.

The good news is, almost everyone passes this stage. It’s just a matter of how well your score is. A bad one can mean a larger down payment required or higher monthly mortgage payments.

handshake

The next step is the actual home shopping. And yes, home shopping is in the middle of the process for a mortgage application. After choosing a home and settling your downpayment, it’s time to process your application and close the deal. This step is where the closing costs come in.

Recommended reading: Best apps for real estate agents 

Explore, Extend, Expand

Now that you’re getting into serious business, another advice for a first-time home buyer is not to limit yourself.

First-time home buyers may feel slightly intimidated and be timid. They usually say yes to the first things they see. Don’t be afraid to negotiate and don’t be scared to consult another real estate professional if needed.

A good real estate agent will genuinely help you. They will understand that this is a real estate transaction in a competitive market and that you’re a first-time home buyer trying to explore your options.

open house sign

Here are some other things to explore:

Feel free to choose. First-time home buyers like you need to understand this will be your home. You have the liberty to be reasonably picky, to take charge of how you want to budget your finances, and more.

FAQ

Are There Fixed Rates for Down Payment?

There are no fixed rates for down payment. It will depend on the sellers of your home, and they will base it on your financial records.

It’s a matter of trust, too. They will most likely require a higher down payment if your credit records are inadequate. This ensures that even if you run off or fail to finish the transaction, they have your down payment to hold on to.

What Exactly Are Closing Costs?

Closing costs are the fees on top of the entire transaction. They are incurred upon the completion of the transaction. You may think of them as miscellaneous fees too. Some examples are:

That’s why it’s essential to follow the 2nd tip: over budget. There are costs on top of costs!

Is It Harder to Buy A House If You're a First-Time Buyer?

It’s not harder per se, but you do have to prove that you’re a serious and qualified buyer.

Since the real estate market is competitive, sellers may tend to trust those who already have experience. Experienced buyers will also know how to negotiate better and get their way around, so if you’re “competing” with someone like that, it can be more challenging to convince them.

But don’t worry, that’s not a rampant concern. As long as you have the money, completed the requirements, and if you’re serious, real estate agents won’t ignore you.

What Season Is the Best for Buying a Home?

They say that the winter season would be the best time if you’re catching the low-rates season. Since it’s either too cold to go out, or some are out of town, buyers are not active during this season.

That means sellers would have to lower their prices too or be easier to negotiate with since there aren’t many buyers.

What's a Good Credit Score?

The standard would depend on the lenders, but the average minimum is 620 or higher [1]. You can improve your credit score as you, too.

Summary

Home-Planning

This doesn’t mean immediately selecting your house. Plan first. What are your non-negotiables? What is your target location? How many rooms do you need?

Overbudget

On top of your house price, there are a lot of additional costs.

When planning for your financial allocations, ensure you’re saving over and beyond your intended budget. Perhaps 2-3 times your original goal. You can also consult advisors and professionals to help you manage your finances better. Securing your money is also helpful in speeding up the process.

Mortgage and Loans

You don’t have to rely on your own money 100%.

While we’re not encouraging debts, we’re suggesting the possibility of loans. There are trusted government-run agencies to help you within safety precautions and avoid scams. But be wary of the plans you are applying to. Conduct a lot of research before getting into contracts.

Explore, Extend, Expand

Don’t limit yourself to the options in front of you. This is a common mistake, and a lot of sly agents know that. So make sure to explore, extend, and expand more options before finalizing anything.

Conclusion

Buying your first home can be intimidating. Of course, you’d want everything to be perfect without denting your budget at the same time. 

But our housing specialists are here to tell you not to worry too much. There are government agencies set in place, trusted agents, and tons of tips willingly shared by experienced buyers! Our team hopes that this guide and pieces advice for a first-time home buyer has shed some light on home-hunting journey.

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Tal Shelef
Tal Shelef is a know it all when it comes to pre-construction developments Canada Wide. His years of daily research and growing up on construction sites / seeing development sites grow from the ground up at an early age gave him a passion like no other. He uses his knowledge to educate Condowizard’s clients. Have a conversation with Tal and see how much value one phone call may provide you.

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Material on this page is not intended to conflict with buyers/sellers under contract with any brokerage. All information on this site is obtained through online sources and may not be reliable. If there are any changes you’d like us to make on any pages or if you are the owner of a development and would like us to remove your listing, Condowizard & Its owners will comply right away.

We represent you, the purchaser – not the builder. Tal Shelef – Sales Representatives @ iPro Realty.

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