Buying Your First House? 5 Steps to Get Started

Homeownership is a key part of the American dream. If you are eager to start your homeownership journey, you need to know a few things first. Check the home-buying tips below for a less-stressful process.

1. Understand Your Financial Health

Before you browse through endless listings in search of your dream home, audit your expenses and income to ensure you can handle the costs of homeownership. A home brings added expenditures for insurance, repairs, taxes, and utilities, which quickly add up.

Check your savings, and ensure they can cover up-front expenses like the down payment, relocation costs, and closing costs on your mortgage. The next step is to account for your expenses and look for saving opportunities. 

Then, audit and strengthen your credit as lenders check your credit scores to determine your qualifications for a mortgage. The best tip is to pay down as much debt as possible and keep credit cards low. Also, don’t take up new loans as you save for a down payment. 

2. Shop for Mortgage Options 

Most Americans take out mortgages for home purchases, and you should seek loan preapproval before you shop for a house. You can explore both conventional and government mortgages to get a good deal.

Your lender or mortgage broker lets you know how much mortgage you qualify for by looking at various documents, such as your employment income, tax returns, and bank statements. Some lenders offer tailored mortgages for first-time buyers, so compare different loan types to find the best fit for you.

Most homeowners prefer fixed-rate mortgages, where the interest rate doesn’t change for the loan’s duration. You will find it easier to budget for this type of mortgage. Adjustable-rate mortgages have lower interest rates, which vary according to market conditions. 

3. Find a Real Estate Agent

In the age of DIY, you may attempt to buy a home independently. However, the home-buying process is overwhelming, and a real estate agent advocates for you each step of the way. Many first-time buyers hesitate to contact an agent because they want to cut costs. 

However, you aren’t responsible for paying the agent directly as agents receive payment after the sale of a house. So, talk to friends, family, and other first-time homebuyers for agent recommendations. 

One of your agent’s roles is to help you find homes that meet your requirements and budget. The professional tells you if a seller has appropriately priced a house you like then oversees the negotiation and closing process and prepares the associated paperwork.

4. Ask for a Home Inspection

When you tour homes, check for obvious issues, such as watermarks on the walls and ceiling, sagging floors, cracks in plaster, and sticking windows. 

Once a seller accepts your offer, your real estate agent helps you arrange the home inspections. The inspections help uncover any issues that threaten the home’s integrity, such as mold growth, cracks in the foundation, sagging roof, and leaky plumbing pipes. 

You pay for the home inspection, but it saves you from costly repairs down the line. You can also use the report to negotiate better prices, especially if the house requires extensive repairs.

5. Close and Get Insurance

If the inspection report satisfies your requirements and the seller accepts your offer, you are ready to close. The advice of a real estate agent is particularly vital during closing as it involves a lot of paperwork. You also require proof of home insurance and money to cover closing costs like surveys, loan origination fees, transfer taxes, and title search fees. 

The home buying process intimidates many first-time buyers, but you only need a reliable real estate agent by your side. Contact us at BHHS Towne Realty to explore various real estate opportunities.