Having a good real estate agent on your side can help you eliminate the homes that don't meet your unique needs, and hone in on the home that does meet those needs. A savvy real estate agent knows the good homes in the good neighborhoods and communities, and can help you negotiate a better price once you've focused on a single property. A real estate agent will also be there with you when you close on the house, and can steer you away from making any last-minute mistakes, and help you cut down on often-onerous home closing costs.
Don’t hit the open houses just yet. Make sure your finances are in order, so you know what you can realistically afford. Use a mortgage calculator to estimate your budget given your income, debt, savings and other financial obligations. Check your credit score and compare your debt to income. You should be able to comfortably pay your full mortgage payment (including taxes and insurance) each month. And you likely need money up front for a down payment and closing costs. The good news is, most first-time homebuyers put down less than 20 percent.

Buying a house across the street from a high school didn’t seem like such a bad idea when you saw how nicely renovated it was. But when you don’t have kids and Friday night football games are keeping you up later than you would like, you realize you should have made a pros-and-cons list regarding the location. Don’t let a charming interior override a location you dislike or a lot that will give you flooding problems. “If you don’t like your lot, don’t buy the house, because you cannot change that,” says Kim Wirtz, a Realtor for Century 21 Affiliated in Lockport, Illinois.


This is the day you get your house keys—but first, you have some serious paperwork to do. You’ll set an appointment for closing on your house, and you’ll need to bring your driver’s license, a cashier’s check for your down payment and closing costs (which range from 2 to 5 percent of the home’s purchase price) — and a lot of patience. You will sign and initial dozens of papers.
I often also recommend using the site, LendingTree to quickly get four or five competing mortgage rates from different banks. These rates will be more accurate than the ones you see in advertisements and websites because banks provide real rates based upon your credit profile and the location and value of the home you want to buy. Learn more about getting mortgage quotes and pre-approval from LendingTree.
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VA and USDA loans: Certain veterans, active members of the military, and qualifying residents of designated rural areas can qualify for a 0% down-payment housing loan -- mortgage-insurance free as well -- from the Veterans Administration or the U.S. Department of Agriculture. In this case, first-time home-buyers could walk into a $300,000 house for just the closing costs, plus the suggested six-month buffer.
Closing costs and prepaids: Alex Clark, a real estate Endorsed Local Provider whose team closes an average of 100 homes a year in Portland, Oregon, advises his clients to save around 3% of a home’s purchase price for closing costs and prepaids. But that percentage can vary depending on how expensive fees and taxes are in your area. Closing costs are the fees charged by title companies and lenders involved in your real estate transaction. Prepaids cover any prorated property taxes and insurance items.
Now you're getting into serious home buying territory. Once a bank or mortgage lender gives you a price range for a home mortgage, you can go ahead and attempt to get pre-approved for a home loan. In a pre-approval scenario, a mortgage lender will dig deeper into your personal finances. You'll fill out a mortgage application (and pay a fee to do so), undergo an extensive credit check and answer any questions a mortgage lender may have about your ability to repay a mortgage on time, and in full. If you're approved, you'll receive a conditional commitment from a mortgage lender to green light a home loan for a specific loan amount and with a specific interest rate range. A pre-approval document from a lender is pure gold for a home buyer, as it shows a demonstrated ability to procure an actual mortgage, and shows a home seller that you're a serious buyer.

While getting legal aid is optional, it is always better to get a professional legal opinion on your closing documents. The complex jargon often mentioned in the property documents is difficult to understand even for the well-educated individuals. For an appropriate fee, opinion from an experienced real estate attorney can offer multiple benefits, including hints of any potential problems in the paperwork. In some states, an attorney's involvement may eventually be required by law to handle the closing.
A lender will help you determine exactly what you can afford and, therefore, which houses you should be considering. To arrive at a purchase price, you’ll factor in expenses like homeowners insurance, association dues, and utilities to make sure you can comfortably make your mortgage payments. The lender will then identify the total amount of money it's willing to lend you.
First-time home buyers tend to pay more than experienced buyers would pay for the same house, according to research conducted by two economists with the Federal Housing Finance Agency. In their analysis of appraisal data from more than 1.7 million home sales, FHFA economists Jessica Shui and Shriya Murthy concluded that first-timers overpay by an average of 0.79%, which was nearly $2,200 per house, according to the data set they examined.
Now that you have a budget, you’re in a better position to meet with a lender and discuss loan options, current interest rates and how much you can borrow. Once you find a loan that fits your needs, get a prequalification letter, which estimates your borrowing power based on your financial information. Keep in mind prequalification is not a commitment to lend. You will need to submit additional information for review and approval. Still, having this letter in hand when you make an offer shows sellers you are serious and gives you some negotiating leverage.
Want a trusty home-buying guide by your side? Most first-timers will want a great real estate agent—specifically a buyer's agent, who will help you find the right houses, negotiate a great real estate deal, and explain all the nuances of home buying along the way. The best part? Their services are free to first-time home buyers (since the seller pays the sales commission). Here's how to find a real estate agent in your area.
As one of the country's former industrial hubs, Buffalo has shrunk significantly over the last 60 years. But the good news is area residents benefit from a low cost of living. Spending just 25.54 percent of the blended annual household income on housing and utilities, Buffalonians have also been enjoying steadily declining unemployment rates since 2012, dropping from 8.5 percent that year to 5 percent in 2016, according to the Bureau of Labor Statistics.
When you know what you can afford, start limiting your options. Take time to learn the neighborhoods you’re considering: Research the schools and municipal services, and drive through them at various times, day and night, to determine whether you want to actually live there. Do you feel safe walking around the neighborhood? How far is it to the nearest stores and restaurants, and how much does that matter to you?
Once the property enters escrow, the purchase should be contingent upon it passing a home inspection. Once your offer is accepted, arrange to have an inspector visit the property and identify anything that needs to be fixed. Both you and the seller should receive a copy of the inspection report, after which you can renegotiate with the seller in case anything needs to be fixed. In worst cases, the contingency also protects you in the event that you would like to withdraw your offer.
Or better yet, decide how much you’re willing to pay. Just because you can qualify for a larger mortgage doesn’t mean you want to have that kind of payment each month. Use the mortgage affordability calculator to help determine what you can afford. Now is also a good time to research your housing market and start going to open houses in your prospective neighborhood to give you a good sense of what your money will get you.
Lastly, what's the market like in the neighborhood? Is it like New York City, where condos get snatched up with all-cash offers, or are you in a Las Vegas-esque location, where empty homes are a common site? In the former situation, it may be a good idea to start with a strong offer to beat out an army of other suitors, whereas you may have more leeway in a market like Vegas.
2. How much house can you afford? How good your finances look from a mortgage lender’s perspective isn’t the only thing to examine. You should also look at savings that can be used toward a down payment and determine how much you’d be able to afford on a monthly basis for your principal mortgage payment, interest, taxes and insurance, which Dabit recommends calculating as 28 percent of your gross income. “That’ll help you figure out how much you can borrow and sustain long-term,” he says.

No one loves shelling out money for unexpected expenses, but sometimes that seems like a rite of passage in homeownership. “Most of the time, the unhappy surprises are simply due to people being unaware of the things that can crop up,” says Brad Hunter, chief economist for HomeAdvisor. First-time homebuyers in particular may not know what to expect after closing on a home, and there’s nothing worse than developing buyer’s remorse about one of the largest investments you’ll ever make. Here are eight headaches to prepare for if you’re looking to purchase a house.


Don’t hit the open houses just yet. Make sure your finances are in order, so you know what you can realistically afford. Use a mortgage calculator to estimate your budget given your income, debt, savings and other financial obligations. Check your credit score and compare your debt to income. You should be able to comfortably pay your full mortgage payment (including taxes and insurance) each month. And you likely need money up front for a down payment and closing costs. The good news is, most first-time homebuyers put down less than 20 percent.
Let the serious shopping begin! By now you’ve talked things over with your agent and you both know what you really want and need in a home. Armed with this, your price range and knowledge of the local area, look at listings online and with your agent, who will come up with properties for you to tour. Chances are you’ll discover some new things to love or hate about homes and refine your search.

Moving and other expenses: Moving expenses can vary from hundreds to thousands of dollars depending on how much you’re moving and how far away your new home is from your current place. To help with budgeting, you can call moving companies in your area for quotes ahead of time. If you plan to make updates to your home—like repainting, installing blinds, or buying new furniture—you’ll need cash for that too!
The largest metro area to make the Best Affordable Places to Live list, Houston residents spend 26.47 percent of the median blended household income on housing. The Texas metro area also sees a relatively low cost of living despite the significant number of people moving there. Houston's population grew by 6.84 percent between 2011 and 2015 due to net migration alone, according to the U.S. Census Bureau.
When you’ve selected a Realtor, start searching in earnest for your new home. Your real estate agent will find properties that he or she thinks you may like, but you can also search on your own. Check out internet listings, drive around and look for yard signs, and ask around to learn about houses that may be available in the neighborhoods you want. In a seller’s market, where available properties may be limited, try to exhaust all your options—not just Trulia, Zillow, and whatever your Realtor sends your way.
You can get pre-qualified for a mortgage, which simply gives you an estimate of how much a lender may be willing to lend based on your income and debts. But as you get closer to buying a home, it’s smart to get a preapproval, where the lender thoroughly examines your finances and confirms in writing how much it's willing to lend you, and under what terms. Having a preapproval letter in hand makes you look much more serious to a seller and can give you an upper hand over buyers who haven’t taken this step.
I was readying myself to start my move as I am aiming to work away from our home and getting a new home is something that’s on my list of priorities. Knowing that getting one’s financial ready first for us to learn whether if we have enough income to sustain ourselves once we move as you’ve mentioned is a very helpful tip. That is something I would surely keep in mind as it would ensure that I can keep on living alone and independently. Thanks for the helpful guide on how to purchase one’s first home!
To your initial savings for a $300,000 home, it's also wise to add enough to ensure that any unexpected twists and turns are accounted for after you move into your new house. A sensible goal is to think of that buffer as a half-year of mortgage payments. That would be $10,572 for the buyers in our initial $300,000-at-10% model -- a total of $46,572-$48,072 in the bank before closing a deal.
Qualifying for a loan isn’t a guarantee your loan will eventually be funded: Underwriting guidelines shift, lender risk-analysis changes and investor markets can alter. “I have had clients who signed loan and escrow documents, and 24 to 48 hours before they were supposed to close were notified the lender froze funding on their loan program,” says Recchia. Having a second lender that has already qualified you for a mortgage gives you an alternate way to keep the process on, or close to, schedule
Chances are your home inspection report will turn up some problems with the home — but, keep in mind, not all repairs are created equal. There are major issues that will likely need to be dealt with before a lender will honor a home loan, such as structural problems and building code violations. In these cases, the homeowner is responsible for repairs before the sale can go through.
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