Purchasing your first home is a big deal! Usually, it’s the culmination of years of saving and planning. This is a major milestone, and you should celebrate coming this far.
As exciting as it is, buying a home can be difficult. Moving and buying a house frequently rank high as some of life’s biggest stressors. But with research and planning, you can be prepared to take it on with ease.
Here are 5 ways that first-time homebuyers can prepare to take the plunge:
- Be sure you’re ready to commit. You’re probably already aware of this, but it bears repeating: purchasing a home is a huge commitment. Before officially jumping into the hunt, ask yourself these three questions:
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- Can I stay in this house for 5 years?
- Do I have an emergency fund to cover at least 3 months’ worth of expenses?
- What is my endgame? (Will this be your ‘forever home?’ Will you renovate then sell after 5 years?)
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- Research first-time homebuyer assistance programs. In addition to your saved down payment, check the many programs aimed at assisting first-time homebuyers, both through the government and private lenders. In addition to asking your bank about assistance programs, check your state government’s website and the HUD website. There also are many local grants and other programs that can offer assistance.
- Rethink down payment amounts. Conventional wisdom has taught us that you need 20% of the home’s price for a down payment. That isn’t necessarily the case. While it is great to have that much, many first-time homebuyer programs and grants allow you to put down as little as 3%. And, if you have a good debt-to-income ratio and great credit score, that can help get a great rate while allowing for a small down payment. Read more about down payment amounts.
- Get that preapproval letter! One of the best things you can do is get preapproved before embarking on house hunting. It’ll give you a comprehensive idea of how much you can afford, and if you want to move quickly on a house, it shows the seller that you already have the endorsement of a lender. Read more about why you should get preapproved first thing.
- Take advantage of open houses. If you’re eyeing a specific neighborhood, keep your eyes peeled for open houses. They can give you an excellent idea of what the houses in that area are like and how much sellers are asking. Plus, you’ll have the chance to talk to a variety of real estate agents if you are on the lookout for one.
Yes, it can be overwhelming. But buying a home for the first time is a huge accomplishment and can be made easier and more exciting with some careful preparation!
