Buying your first home is exciting, but it can also feel overwhelming. Between figuring out finances, navigating the market, and making sure you’re protected, there’s a lot to consider. To help you start off on the right foot, here are six key things every first-time buyer should know.
1. Do I Really Need Professional Help?
Just like you’d trust a doctor with your health, it makes sense to have experts guide you through buying a home. A real estate agent can help you find and negotiate for the right property, a loan officer can walk you through financing, and an insurance agent ensures your new investment is properly protected. Having the right team makes the process smoother and far less stressful.
2. How Do I Get Pre-Approved?
Pre-approval is a crucial step before shopping seriously. While you can apply online, working with a local lender often has advantages—they know the housing market in your area and may offer more favorable loan terms. To get pre-approved, you’ll typically need to provide documents like pay stubs, bank statements, tax returns, and W-2s. This helps the lender assess how much you can borrow and what type of loan works best for you.
3. How Much House Can I Afford?
It’s tempting to stretch your budget for the perfect home, but it’s important to be realistic. Use a mortgage calculator to estimate monthly payments and remember to include extra expenses like utilities, HOA fees, insurance, and maintenance. Leaving room in your budget helps prevent financial strain once you’ve moved in.
4. What About the Down Payment and Closing Costs?
How much you’ll need upfront depends on your loan type. Many experts recommend saving 20% for a down payment, but programs like FHA loans allow you to buy with as little as 3.5% down. Even if you qualify for a low down payment loan, having extra savings gives you flexibility—whether you put it toward lowering your mortgage or investing in home improvements.
5. When Should I Arrange Homeowners Insurance?
Don’t wait until the last minute to secure coverage. Once your offer is accepted and you’re under contract, it’s time to shop for homeowners insurance. Lining up a policy early avoids closing delays and ensures you aren’t rushed into a plan that doesn’t fit your needs. Most lenders require insurance to be included in your monthly mortgage through escrow, so your premium will typically be paid automatically.
6. What Happens to My Mortgage If Something Happens to Me?
If you pass away before your mortgage is paid off, the responsibility could fall on your family. While your heirs may choose to sell the property, this could leave them with added stress during a difficult time. Having the right life insurance policy can protect your loved ones, cover the mortgage balance, and provide peace of mind.
Final Thoughts
Purchasing your first home is one of life’s biggest milestones. By preparing ahead of time and understanding the process, you’ll make smarter decisions and set yourself up for long-term success. Keep these six tips in mind as you move forward, and you’ll feel more confident every step of the way.
