Are you buying a home for the first time? It can be extremely stressful! My husband and I have been looking at (and drooling over) houses for a while now. We’re eager to get into our own place. But it is seriously overwhelming!
Where do you start? I mean, beyond staring at the beautiful, bright kitchens and lusting after the walk-in closets that are bigger than your bathroom. No? Just me?
Well, I want to help cut down on the overwhelm of buying your first home. So I’ve compiled everything I could find, everything I’ve learned, and some insider info! Buckle up!
This post is made in partnership with Homie. All thoughts and opinions are my own, as always.
Create a Need and Want List
It’s best to enter the home buying process with a general idea of what you’re looking for. This will help keep you focused, and let you narrow down the endless sea of choices.
This is a great way to prevent overwhelm, because you’ll know beyond a shadow of a doubt what is most important to you. I suggest starting with a brain dump. If you have a partner you’re buying the home with, you should each jot down everything you’d like in your prospective home.
Once it’s all written out, go through the lists together. Create a master list that is broken into two columns. One for needs and one for wants.
You may want a double oven, a two car garage, and a basement. But you have to look at it from a different point of view. Do you want three bathrooms, or do you need them?
By the end of this brainstorming sesh, you’ll have a rock solid list that both of you agree on. You’ll have a general idea of what your house might look like. And most importantly, you won’t get lost looking at beautiful homes that just aren’t right for your family.
Explore Your Mortgage Options
Next, you’ll want to know how much you can afford. The general guideline is a 20% down payment. However, sometimes you can get in for much less.
Do a quick Google search and see if your state offers any first time homeowner assistance (assuming you’re a first timer). Many will help with the down payment, closing costs, interest rates, or tax credits.
You might be able to qualify for federal assistance. If you live in a rural area, you might be able to qualify for a USDA Loan, which is backed by the Department of Agriculture.
There are also FHA loans, which are backed by the Federal Housing Administration. Either of these options can help cut costs if you qualify.
Always try to explore multiple options. Getting at least three quotes can save you $3,500 over the first five years of your loan, according to the Consumer Financial Protection Bureau. That’s a good chunk of change and definitely worth it.
Do Your Research
Now that you know how much you can get approved for, it’s time to start looking. You can set price ranges on Homie so that you only see houses in your budget.
Research schools nearby, even if you don’t have kids! The quality of schools directly affects home value, so it’s a good idea to check that out.
Research crime rate and local safety. Take a look at a few local newspapers, as well.
Remember to research any nearby registered sex offenders. Obviously, you may not be able to find a place with zero sex offenders, but it’s a good idea to look. If there is a nearby area with a cluster of sex offenders, that probably means the landlord allows it, so you might get more in the future.
If there are any places you’ll need to visit frequently, hop on Google maps and see how close those things are. Pharmacies, libraries, hey, maybe even your favorite fast food place (no judgment!).
All of these things are important to think about. Sometimes it’s easy to get caught up on the home itself, but the neighborhood and city are just as important to think about.
Stay Under Budget
If at all possible, shoot for below your pre-appoval amount. Remember that you’ll have additional fees after you purchase your home.
Plus, just because you can get approved for so much, doesn’t mean you’ll want to sacrifice other things in order to pay your mortgage each month.
Homie might be able to help with closing costs, but you’ll have lots of other expenses as well. You’ll need someone to install internet, perhaps you want the carpets cleaned, or you need more furniture for your larger space — things that are one-time expenses, but every penny will count. And, especially at first, there could also be surprise expenses that you just can’t anticipate.
So, instead of shooting for a home as close to the pre-approval amount as possible, try to stay under that amount.
If you previously lived in an apartment, they might have included gas or electricity in the rent. So take into consideration that you will have to pay those on top of your new mortgage.
You’ll also need to look at home owners insurance, and maybe even Home Owners Association fees. Some insurance plans won’t cover things like flooding, so if you’re in an area where that’s a concern, you may need additional flood insurance if that’s the case.
Visit Multiple Houses
Even if you find a home that you think is perfect, it’s a good idea to check out a few. You might find something even better!
Or, you might notice something in another house that makes you second guess your first choice.
Make sure that you’re asking loads of questions. Find out when the home was built, when major systems (AC and heat) were installed, etc. You can’t ask too many questions! This could potentially be your home for years to come, so you’ll want to know everything.
Take Your Time
Unless there’s a deadline you have to make, take as much time as you need. Buying a home is a huge decision, one that shouldn’t be rushed.
You may feel pressured to hurry things along, but try to remember that what will be, will be. If you miss out on submitting an offer on a house because you took too long, don’t stress about it. Another home will come along.
All of this can feel overwhelming, so there’s no reason to add more stress by thinking you have to pick a house right now. Do your research, make a plan, create a budget, and take your time.
Let Homie Help
Homie was created to help break down the overwhelm. You get a team of professionals who walk you through everything, for a fraction of the cost of a realtor.
Homie uses technology to streamline the entire process, which means less stress and more freedom. Plus, it’ll save you a ton of money. On average, about $10,000!!
Do you have any tips you’d like to add? Share in the comments so other readers can learn, too!