Owning a a home is the ultimate goal for many people including first time home buyers.
Some may not know where to start or what needs to be done.
Here are some important steps to buy a house that can help get the ball rolling.
This is the reason why I created these first time home buyers tips to help make the dream of owning a home come true.
More importantly, these first time home buyers tips will help plan for a successful future.
These tips will also provide the home buyer with leverage when it comes time to making your first home purchase.
First Time Home Buyers Tips
One of the first challenges that many first time home buyers will face is establishing credit to be approved for a loan.
Unfortunately, without good credit, it will be difficult to get approved for a loan.
I’m not saying it’s impossible but the higher the credit score increases the chances of getting approved.
The credit score will also have an influence on the total loan amount needed to purchase.
Now that we know how important credit scores are when it comes time to purchase a home, it’s time to start being proactive.
First Time Home Buyers Challenges
For example, just like everything else, it may take some hard work and dedication when preparing to buy a home but the rewards are incredible.
Becoming a home owner doesn’t happen overnight. It may take some time to get all of your expenses in order but don’t give up!
Yes, there will be some challenges to overcome but with every challenge we face it only makes us stronger.
One of the best motivational quotes I have every read:
Don’t be afraid of challenges. Let them take you somewhere new. ―
With that said, I’m going to give you some much needed home buyers tips that can help you achieve the ultimate dream of becoming a home owner.
Here are 6 First Time Home Owners Tips that will help get you started on the journey to owning your first home.
- Pay Off All Debt
- Build an Emergency Funds Account
- Save for a Down Payment
- Get Preapproved for a Loan
- Determine How Much House You Can Actually Afford
- Research Neighborhoods for the Best Fit
First Time Home Buyers Tips – Pay Off All Debt
Paying off all debt will help increase the chances of obtaining a loan.
Not only will it it improve your credit score but it will also improve your chances of getting a loan for the maximum amount.
When paying off credit card debt it is important NOT to close the account once you have paid off the balance.
Believe it or not, by closing the credit card account will actually hurt your credit score.
Try to keep your oldest account open and active as long as possible.
First Time Home Buyers Tips – Build an Emergency Funds Account
When thinking about purchasing a home it is a smart idea to build an emergency funds account.
Figure the amount to cover about 3 months of living expenses.
Life can throw a wrench into things and you never know when you will have to use these emergency funds.
Reasons to have emergency funds
- Loss of Employment
- Major Health Expense
- Home Repairs
- Vehicle Repairs
Honestly, the last thing you should have to worry about is finally living in the home of your dreams and then not being able to enjoy the home you worked so hard to obtain.
Having these emergency funds available can help prepare for those unexpected challenges that many home owners face on a daily basis.
In summary, plan ahead for these challenges and roll with the punches.
First Time Home Buyers Tips – Save For a Down Payment
When it comes to purchasing your first home, saving for a down payment seems to be the most challenging for many first time home buyers.
Saving up for a down payment can be tricky.
Since rent here in the South Florida areas keeps increasing every month, it’s a good idea to have a savings plan in mind.
Even if you are not planning to purchase a home in the future it is still recommended.
More importantly, balancing the cost of monthly living expenses while trying to save for a down payment can seem like a never ending battle.
But, there is a light at the end of this tunnel.
Step 1: Start With a Clear Down Payment Savings Goal
Step 2: Lower Some Expenses in Your Monthly Budget
Step 3: Be Disciplined on your spending
Step 4: Boost Your Income With a Side a Side Income
Step 5: Download an Online Money Management App to Track Expenses
Although it may seem challenging at first to start saving for a down payment, don’t get discouraged.
The more disciplined you are with your spending habits the sooner the savings account balance will rise.
First Time Home Buyers Tips – Get Pre approved for a Loan
Usually, getting preapproved for a loan is one of the first steps of the home buying process.
As a result, as a first time home buyer this might not be the best step to start with due to the reasons I stated earlier in this post.
For instance, many first time home buyers have never even attempted trying to get pre approved for a loan and aren’t sure what to do or where to start.
Here’s what you need in order to start getting pre approval process started.
5 Items Needed To Help You Get Approved
- Proof of Income (W-2 Statements From Past 2 Years)
- Proof of Assets (bank statements & Investment account statements)
- Good Credit (Most Lenders Require FICO Score of 620)
- Employment Verification (Pay Check Stubs)
- Proper Identification (Drivers License & Social Security #)
The higher the credit score the better chance of getting lower interest rates.
The lower the credit score is the more down payment will be required.
First Time Home Buyers Tips – Determine Home Much House You Can Afford
First Time Home Buyers Tips – Research Neighborhoods
- Quality of Schools
- Neighborhood Crime Rates
- Commute & Traffic Times During Rush Hours
First and foremost, always make sure that the neighborhoods you are researching are the best possible fit for you and your family.
Make sure to weigh out the pros and cons of each neighborhood and choose the neighborhood that you can envision living in for many years to come.
First Time Home Buyers Tips – In Conclusion
When the time comes to decide to buy a home is an incredible experience and it should be enjoyable from start to finish.
It may seem like the home buying process may be intimidating for first time home buyers but it shouldn’t be.
Organization, proper preparation, and having a loyal real estate professional on your side will help guide you through the home buying process.
Please feel free to reach out to me if you have any other questions by filling out the form below. I’d be happy to help you find a home that you can call your own!
Happy House Hunting!