14 Things You Must Do Before Buying Your First Home
Written by
Cynthia Measom
Edited by
Chris Cluff
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While exciting at first, buying your first home can seem overwhelming once you realize all of the steps you have to complete and hurdles you have to clear to secure your mortgage. But by knowing what to expect, you’ll be better equipped to navigate the first-time homebuying process more smoothly.
From getting a mortgage pre-approval to closing the deal, understanding the key actions you need to take (and having help from a seasoned pro along the way) can help transform this complex journey into something more manageable.
Here are 14 things you must do before buying your first home.
Know Your Budget
Knowing your budget is the most important consideration.
“How much can you afford to spend on a down payment, monthly mortgage payments and other costs associated with homeownership?” said Linda Schroder, real estate investor at Cash For Houses. “A good rule of thumb is to aim for a down payment of at least 20%, but there are programs available that allow you to put down less. You’ll also need to factor in closing costs, which can range from 2% to 5% of the purchase price of the home.”
Make a List of Your Needs and Wants
Schroder said to ask questions such as the following: “What kind of home do you need and want? How many bedrooms and bathrooms do you need? Do you want a yard? What kind of neighborhood do you want to live in?”
She said to consider your lifestyle and make a list of your must-haves and nice-to-haves when it comes to your future home.
Consider Where You Want To Live
Schroder said you need to know where you want to live.
“Consider factors such as proximity to work, schools and other amenities,” she said. “You’ll also want to think about the commute and the overall vibe of the neighborhood.”
Evaluate the Market
“A competitive housing market can make it more difficult to find a home and get a good deal, so it’s important to be prepared,” Schroder said. “What are the current housing market conditions in the area where you want to buy? Are prices rising or falling? Is there a lot of inventory available?”
Investigate Financing Options
“There are different types of mortgages available, so it’s important to shop around and compare rates,” Schroder said. “You’ll also want to make sure that you can afford the monthly payments and that you’re comfortable with the terms of the mortgage. What kind of mortgage will you qualify for? What will your interest rate be? How much will your monthly payments be?”
Get Educated
“There are many resources available to help first-time homebuyers learn about the buying process,” Schroder said.
She suggested talking to friends, family and real estate professionals, reading books and articles about homebuying and taking a homebuyer education class.
Be Prepared To Compromise
“You may not be able to find your dream home right away,” Schroder said. “Be prepared to compromise on some things, such as the size of the home, the location or the price.”
Be Patient
“Buying a home takes time,” Schroder said. “Don’t rush the process. Take your time to find the right home for you and make sure that you’re comfortable with all of the terms of the purchase before you sign anything.”
Get Pre-Approved for a Mortgage Loan
“This means that a lender has reviewed your credit and finances and has agreed to lend you a certain amount of money to buy a home,” said Linda Schroder, real estate investor at Cash For Houses. “Pre-approval is important because it shows sellers that you’re a serious buyer and that you’re qualified to buy their home. To get pre-approved, you’ll need to provide the lender with information about your income, debts, assets and employment.”
Find a Real Estate Agent
Schroder said a real estate agent can do a lot for you, including helping you find homes that meet your needs and budget, negotiating on your behalf and guiding you through the buying process. However, all real estate agents aren’t created equal.
“When choosing a real estate agent,” she said, “be sure to interview multiple candidates and ask about their experience working with first-time homebuyers.”
Start House Shopping
“Once you have a pre-approval letter and a real estate agent, you can start looking at homes,” Schroder said. “Be prepared to act quickly in competitive markets. When you find a home that you’re interested in, your real estate agent can schedule a showing for you.”
Make an Offer
If you’re interested in buying a home, you’ll need to make an offer to the seller.
“Your real estate agent can help you with this process,” Schroder said. “An offer typically includes the purchase price, the down payment amount, the closing date and any other special terms or conditions.”
Get a Home Inspection
The next step, if your offer is accepted, is to get the home inspected by a qualified inspector.
“This will help you identify any potential problems with the home,” Schroder said. “The inspector will check things like the foundation, roof, plumbing, electrical system and HVAC system.”
Close on the House
“Once the inspection is complete and you’re satisfied with the results, you can close on the house,” Schroder said. “This is when you’ll sign all of the paperwork and officially become a homeowner. Closing typically takes place at a title company or escrow office.”
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