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Tips For a First Time Home Buyer

Buying a home is the American dream. When you grew up, your parents had a simple, yet memorable house. There was enough space for the entire family and a garage to put the cars, and maybe even some property. Now that you’re growing up, you are starting to think about buying a property for yourself, rather than continuing to throw your money away in that rental where you’re staying.

houseFirst of all, sometimes renting isn’t all that bad of a deal. If you can find a cheap rental, you can quite often spend less money per year there than you would have if you bought a house. Plus, there are no unexpected expenses. After owning a house for 3 years, I have begun to understand the things that can go wrong if you own your own property. I have had pipes burst, furnaces puke, and water leaks through the roof. Home ownership is a constant headache and can be quite expensive. Again, if you have a cheap rental, try to ignore your friends that are telling you that you need to buy a house. There are many cases where it is just not the smartest option.

Buying That First Home Wisely

If you feel that buying a home is right for you, then make sure that you go about it the right way. Do NOT purchase a house with zero money down and an adjustable rate mortgage. This will cost you a lot of money up front and continuing to rent would probably be a better option for you.

Do not listen to the banks when they tell you how much home you can afford. Instead, decide how much you would feel comfortable paying each month and use a mortgage calculator to help you understand what that would mean in terms of a total loan amount. When I bought my first house, I knew that I didn’t want to spend any more than $100,000 dollars, even though they probably would have given me a loan for $175,000 or so. Today, I thankfully only have a mortgage payment of $53,000 that I hope to pay off by the end of this year.

Next, save up a large sum of money for that down-payment – I would advise that you put down at least 20%. This will keep you from paying additional payments for PMI and should always keep you above water, even if you home decreases in value.

For the first time home buyer, finding the right loan can often be confusing. For me, I would always choose a 15 year fixed loan (or less if you can). This is the only loan that is actually a decent deal for the consumer, rather than the bank. Then, do your best to pay this loan off quickly so that you can. This is what I am working towards, and I can’t wait to be completely debt free! I’m sure it is going to be an amazing feeling. 🙂



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

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