Are you buying a home for the very first time? If so, don’t worry. There are plenty of first-time homebuyer tips for 2022 and beyond that can keep you from stressing out and keep your money in shape. Below are 12 top tips to keep in mind (as well as the answer to many other questions that first time home buyers often have!).
What is the best way to help first-time homeowners?
The best way to help first-time homeowners is to make sure they’re prepared for the costs of buying a home.
You don’t just buy a home and start paying a mortgage. They’ll most likely need a down payment, money for closing costs and inspections, and more.
By saving money upfront and being prepared, a first-time homeowner can be ready for whatever happens.
Related: How Much House Can I Afford?
There is so much information out there about buying your first home, what to do, and how to make it work both financially and mentally. But what should every first-time homebuyer really know?
There are two main points to remember:
- Your credit score DOES matter
- Your home will be a huge financial obligation
As long as you can remember those two things, and prepare for them, you can start the process of homebuying and get everything else squared away.
What is the first step to buying a house for the first time?
Before you even think about going and looking for homes, what is the first step to buying a house for the first time?
The very first thing you need to do is make sure your finances and credit scores are in order. Those are going to be two important deciding factors when it comes to how much you’re approved for, your down payment, your interest rate, and more.
You’ll want to lower your debt-to-income ratio as much as you can and focus on making sure your credit score is (at the very least) 620 or higher.
Related: Your House is a Terrible Investment
How much money should I have before buying a house?
It’s a common question for those that are buying a home for the first time — “How much money should I have before buying a house?”…
As much as you can.
While there are many assistance programs and non-traditional loan options (like an FHA loan), you’ll still need a few thousand dollars in the bank.
The average upfront costs for first-time homebuyers range from 8%-25% of the home’s value.
For a $200,000 house, that’s at least $16,000 to $50,000 paid before you even get into the house. Now is the time to start saving if you haven’t been!
Is it possible to buy a house in 6 months?
You’re just starting out. You haven’t saved a dime yet. Is it possible to buy a house in 6 months??
You can certainly buy a house in 6 months!
However, this will all depend on your current financial state.
If you’ve already started preparing to buy a house, you may have already started…
- saving money,
- being smart with your credit score,
- and keeping up with your financial accounts.
But for some first-time homebuyers, it can take up to a full year to get your finances in order to buy a home. This is to help you with adding money to your down payment, getting pre-approved, and more.
First-Time Home Buyer Mistakes
While there are many first time homebuyer tips out there to help make the process easier, there are also a few first-time homebuyer mistakes to avoid…
Let’s talk about them!
What should you not do before buying a house?
What the biggest home buying mistake you need to avoid?
First, don’t just talk to one lender.
The more you shop around, the more you can make sure that you’re getting a good deal and interest rate. Experts recommend looking into at least three lenders.
Second, don’t buy more home than you can afford.
Just because you get approved for $200,000, doesn’t mean you can afford it. Take a good look at your finances and find a good price point for what you can realistically afford.
Next, don’t drain your savings!
Even if you’ve been saving for a down payment, it’s important to keep some cash on hand. Try to have another small emergency fund for random expenses, moving costs, and even possible repairs that may need to happen.
Last but not least, don’t mess with your credit.
If you get new loans or credit card accounts before applying for a loan or closing on your home, it can jeopardize your final approval. So steer clear of extras before you actually get into your new home.
First-Time Homebuyer Tips For 2022
Now that you know what not to do, let’s talk about the top 12 first-time homebuyer tips that you need to know going into 2022.
1) Getting Approved
Before you go diving off into Zillow, contacting an agent, or driving around neighborhoods, talk to a lender (or multiple ones like I mentioned earlier).
They can help you with getting pre-approved. That may not seem fun, but it’s an essential place to start. And, getting pre-approved can also help you know how much home you can afford, so you aren’t setting up unrealistic expectations.
When you talk with a lender, be sure to get a pre-approval letter.
You’ll use this when you see a house you love and it will show that you’re a serious, strong, and qualified buyer. This is a great way to stand out from other buyers, especially in a competitive market.
If sellers know you aren’t just talk, they’re more likely to sell the house to you.
3) Keep All Of Your Paperwork Together and Organized
Like other financial obligations, it’s helpful to get all your paperwork together. Staying organized is so important when getting pre-approved, actually buying a home and getting a mortgage, and more.
When getting your paperwork together, focus on keeping your pay stubs, W2s, bank statements, and tax documents in a single place.
Also, you may need to print out and store other documents like…
- your rental history,
- copies of IDs and other documents to prove who you are,
- and paperwork for any other assets you may have.
4) Don’t Make Any Extra Credit Decisions
In addition to what you show to a lender, make sure that you keep your credit score under control. This is not the time to apply for new loans, make big purchases, or open up new credit lines or cards.
5) Find a First-Time Buyer Agent
Working with a first-time home buyer real estate agent is a strategic move. A reputable agent knows the flow of the buying process, common stressors, and how to minimize the anxiety of the exchange. Working with one can help you make better and more informed decisions, so getting one is essential.
6) Reduce Stress
The right agent can be the key that lowers stress and unlocks the joys of home owning. An experienced agent will help you understand the process of buying a house, explore different neighborhoods, and position offers to win.
In some competitive markets, buyer’s agents and seller’s agents worked together frequently. In some regions, agents prefer to work with people they know.
This can help you fast-track your offer to be one that is accepted above others.
8) Respect Priorities
The best real estate agent respects your interests and understands your priorities. For instance, if you want to make a cash offer, he or she will work to represent your preferences.
If you need a longer closing time, your agent will strive to make your timeline work.
9) Focusing On Design Priorities
Every house has unique features that appeal to buyers and sellers. Before you put in an offer, identify your top design objectives (as well as your deal breakers). That way, you know what you’re looking for.
- Is it a master suite that is bright, light, and filled with calm?
- Is it a garden to grow tomatoes and roses?
- Or, is it a country feeling in the middle of a bustling urban center?
Work with your partner and family to focus on the look, feel, and design that spells “home”’ to you. The house you find may have some of the key features, but it has the core “bones” that make you feel exactly at peace.
Beyond this, ask yourself what you love doing!
- Do you live for the beach, surfing, and swimming?
- Are you in love with mountain or road biking?
- Identify the lifestyle you love and want to embrace.
When you know this, you’ll recognize your new home easily. It’s the one where you have an immediate feeling of affinity. You know you’re in the right spot when you can see yourself living the life you’ve been envisioning.
You can find the qualities you want and make the decision for your dream home, while also being smart with your finances.
After you’ve put in your offer, expect to have a home inspection. You’ll be paying for this, and it will reveal all the details that you’ll want to know about your home.
Of course, this may happen more than once, so be prepared to spend a few hundred.
11) Stay Calm
There are a lot of things that can be found during an inspection.
- Electrical issues.
- Foundation issues.
A home inspection report can be scary, especially if you haven’t seen one before. Take a breath. Stay calm. Talk with the inspector and your realtor to find out the scope of any issues.
12) Get Ready To Sign
Depending on your home, expect to sign an insane amount of paperwork.
- Title insurance is one of those things that you’ll need to sign.
- Closing costs can be quite a stack of papers including things like legal fees, insurance, homeowners insurance, as well as city and county documents.
As a first-time homebuyer, you’ll learn all the ins and outs of home buying. However, the good news is, you’ll get the key and open the door to your new home.
First Time Homebuyer Tips – Are You Ready??
As you can see, there are many first-time homebuyer tips that you can use to get the best deal on your home and love what you buy.
While there are many ways to get the house you want for the price you can afford, these tips can make it much easier and less stressful.
Which first time homebuyer tips will you implement? Do you have others? Tell us in the comments below!
AUTHOR Kimberly Studdard
Kim Studdard is a project manager for online entrepreneurs and small businesses. When she isn't spending time with her daughter and husband, or reading her growing pile of horror books, you'll find her working on her HR degree and working towards FIRE.