For many Americans, a home is the most expensive purchase that they’ll ever make, so it makes sense to proceed with care. Taking a little time to review tips for buying your first home can help you avoid common missteps that often trip up other aspiring homebuyers and help you find more joy in your journey to homeownership.
Tips for Buying Your First Home
According to the 2019 Profile of Home Buyers and Sellers published by the National Association of Realtors, first-time homebuyers were responsible for 33 percent of home purchases that year. If you think that you’re ready to take the plunge, reviewing these tips for buying your first home can help you reach your goal.
Step 1: Get Your Finances in Top Form
Before you start browsing real estate listings, you should study your financial records, according to the New York Times. Take some time to review your spending to determine where your money goes. Get a sense of how much you can afford to chip in for a down payment and what monthly mortgage payment fits your budget. Also, check your credit score by requesting reports from the credit bureaus. If yours isn’t where you want it to be, take steps to improve it by looking for errors (and requesting corrections), paying down debt, and catching up on any late or missed payments.
Step 2: Get Preapproved for a Mortgage
Why would you shop for a loan before you shop for a home? As Credit.com reports, there are several excellent reasons to get preapproved before you begin searching for the perfect house:
- Preapproval reveals how much a lender is likely to loan you, which can help you determine your price range.
- Preapproval offers convincing evidence that you are a serious buyer, which can strengthen your position with both real estate agents and sellers.
- The application for preapproval requires a lot of the same information that you’ll need for a loan application, so getting preapproved can give you a head start when you’re ready to apply for your loan.
Step 3: Learn About First-time Homebuyer Programs
As Investopedia points out, there are perks to being a novice homebuyer. First-timers have access to a variety of state programs, tax breaks, and federally backed loans that can make buying a home more affordable. Learning about these programs may help you stretch your budget and get more home for your dollar.
Step 4: Find a Home
When it’s time to find a home, an experienced real estate agent can be an invaluable ally. Whether you’re working with a professional or going it alone, you’ll want to view homes online and tour open houses. Dave Ramsey urges aspiring homeowners to shop for a home that will serve them well both now and in the future. Also, look outside the house and consider the neighborhood, especially its quality, its character, and its proximity to places that you frequent, like your workplace, your kids’ school, grocery stores, parks, and retail shops.
Step 5: Close the Deal
Once you find the perfect house, it’s time to close the deal. As Time reports, this starts with making a competitive offer. Not every offer is accepted, and it may take time and repeated tries to make a winning offer. With that achieved, you’ll need to arrange for home inspections and appraisals and complete your loan application. There’s often a lot of paperwork to be completed at this point, so be sure to respond to requests from your lender promptly. When everything is in order, you’ll head to the closing table to sign papers, finalize your loan, and complete the sale. After that, you’ll officially be a homeowner!
Whether you’re eager to learn how to buy your first home or a veteran of the real estate market interested in purchasing another property (or refinancing one that you already own), you can count on PrimeLending of Denver. With our commitment to excellence and wide-ranging menu of loan products, we’re prepared to help you find the right financing option for your housing goals. Contact us today to get started.