My tip – STICK TO YOUR PRICE RANGE! We looked at 10 houses in our price range and one house just north of our price range. Of course – the more expensive house looked better. We fell in love with it and we stretched our budget to afford it! We didn’t have a chance to view any other prices in that higher price range either so didn’t know if our offer was too high (it was in hindsight). Just a tip!

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One of the most crippling headaches to deal with is a monthly mortgage payment you find you can’t quite afford. Lysette Portales, a real estate agent with Century 21 Jim White & Associates in Treasure Island, Florida, says she stresses to clients that they should shop around for a mortgage with multiple lenders and inquire with each about different program options. “A lot of them might be able to do 100 percent [financing],” she says, noting that many homebuyers typically only know about a couple mortgage programs and settle for one without considering what would be most affordable option both now and down the line.

Seek more than one estimate for expensive repairs, such as roof replacements. A good real estate agent should be able to give you referrals to contractors who can give you estimates. But you also should seek independent referrals from friends, family and co-workers so you can compare those estimates against ones you receive from contractors your agent refers.
The home buying process is a considerably high-stakes endeavor, especially for first-time home buyers. According to the National Association of Realtors, buyers under the age of 36 have made up the largest proportion of home buyers in the U.S. over the last four years. Of this proportion, 66 percent of the buyers purchased a home for the very first time. Whether you are a first time home buyer or someone in need of a refresher, this comprehensive guide to the home buying process is just for you.
Let’s see how this plays out with our example of a $172,600 home. If you multiply $172,600 by the higher 4% closing cost average, you’ll find that you need $6,904 for closing costs. Now let’s add that to your 20% down payment of $34,520. The two together equal $41,424, which is about what you’ll need to save to pay for the down payment and the closing costs on your first house.

As a buyer, just keep in mind that mortgage pre-approval is different from mortgage pre-qualification. Pre-qualify, and you're undergoing a much simpler process that can give you a ballpark figure of what you can afford to borrow, but with no promise from the lender. Getting pre-approved is more of a pain since you'll have to provide tons of paperwork, but it's worth the trouble since it guarantees you're creditworthy and can truly buy a home.
When you get a mortgage, your lender may require you to set up an escrow account. A monthly escrow amount is added to your mortgage payment. The escrow payments goes toward real property taxes and insurance that you would otherwise have to pay once or twice a year. Instead, you generally will pay a monthly payment and the money sits in escrow to be paid by your lender when it’s due. This escrow payment is above the principal and interest portion of the mortgage payment and is required. 
Homeowners insurance and property taxes very based on your geographic location. Florida has notoriously high homeowner's insurance rates, where they average $161.08 per month. In Idaho and Wisconsin, rates are a bit lower, averaging below $50 per month, according to Value Penguin. Property taxes average higher in New Jersey, New Hampshire, Texas and Wisconsin and they're lower in Louisiana, Hawaii, and Alabama.
In a perfect world, I would love to get a 15 year fixed rate mortgage using a conventional loan where I put down 20% (avoiding PMI altogether) in a great neighborhood close to the city (but not too close) with a white picket fence, red door, and black shutters with a boatload of money in the bank to go with it. But here I am, writing about the process and not buying any homes – I’m just trying to pay off my student loans.
The fact that the Raleigh and Durham metro area is relatively affordable – with residents spending just 25.85 percent of the blended annual household income on housing and utilities – contributes to the trend in businesses and residents flocking to this North Carolina hot spot. Raleigh and Durham grew by 6.42 percent between 2011 and 2015 due to net migration alone, according to the U.S. Census Bureau, making it the 10th fastest-growing metro area due to net migration out of the 100 largest in the U.S.
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Before you even look at a single property, you need to know exactly how much you can afford. There are several online calculator tools you can use, but these tools are only estimates. Use these tools as a guide, but then adjust the amount based on your individual situation. How much is your current rent payment? Did you meet that payment each month with ease, or was it a bit of a struggle each month? The payment you can afford right now is a good indicator of what you'll be able to afford in your new home.

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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.

A lender or broker will assess your credit score and the amount you can qualify for on a loan. He or she will also discuss your assets (savings, 401(k), etc.) and debt, as well as any local programs that might be available for down payment assistance. That's where your homework on first-time homebuyer programs can help. If you think you qualify, look for a lender that handles the program you hope to get.


Your inspector will provide a detailed report of everything in the home that could be repaired. Some of the items may not be a big deal, but some may be expensive or important repairs, such as the need for a new roof or HVAC system. You and your Realtor can request that the seller make some repairs, and the seller will have a few days to let you know whether they are willing to make the changes or reduce the price of the house. If the inspection uncovers major problems, such as termites or an unstable foundation, it can be your way out of a sales contract.
Most home sale contracts give the buyer about 10 days to complete a home inspection. If you’re getting a mortgage to buy the house, your lender will likely require you to use a certified home inspector. (Even if you’re not required to get a home inspection, it’s best to get one anyway to make sure you’re not buying a house full of expensive problems.)
Now that a the home buyer has determined the type of home that he or she is most interested in, the location, and has obtained the services of a real estate agent, it is time to view available homes in the area. Of the steps to buy a house, this is often one of the most enjoyable. The real estate agent will locate and screen homes for the buyer and present him or her with the options that best match the established criteria. The agent can set up a date and time to visit potential homes. During this time the buyer should not feel pressured or make hasty decisions.
For the past 15 years, Williams has specialized in personal finance and small business issues. His articles on personal finance and business have appeared in CNNMoney.com, The Washington Post, Entrepreneur Magazine, Forbes.com and American Express OPEN Forum. Williams is also the author of several books, including "Washed Away: How the Great Flood of 1913, America's Most Widespread Natural Disaster, Terrorized a Nation and Changed It Forever" and "C.C. Pyle's Amazing Foot Race: The True Story of the 1928 Coast-to-Coast Run Across America"
Buying a home takes a lot of time -- likely more time than you figured. Exhibit "A" in this case is the "saving for a new home period." This timetable starts well before you see your dream home for the first time. To act fast on a great home purchase opportunity, you're going to need cash, and the more the better. Your chances of buying a home are greatly increased if you can show a lender you have plenty of cash saved up, and that you can meet the seller's likely demand that you can bring the cash needed to buy a home to the negotiating table. That means saving money early and often -- and starting well before you set eyes on that dream home.

Once a person knows how much he or she can afford in terms of a house, it is time to look at the details of where to live. Often people choose a location-based off of factors such as family and work. Although a person may have a general idea of where he or she would like to own a home, it is important to consider all of the options, including urban versus suburban locations. Urban areas are generally in the city while suburban areas are located at the outskirts of the city. People with families may appreciate the suburban areas, which generally have more schools and larger homes and yards. Urban areas are typically more expensive, but because they are at the heart of the city there are more activities, culture, and restaurants. Small towns and rural areas located outside of large cities are also an option and offer more sedate living than larger more urban areas. A person should visit potential locations keeping in mind his or her family's lifestyle and commute.
A lender or broker will assess your credit score and the amount you can qualify for on a loan. He or she will also discuss your assets (savings, 401(k), etc.) and debt, as well as any local programs that might be available for down payment assistance. That's where your homework on first-time homebuyer programs can help. If you think you qualify, look for a lender that handles the program you hope to get.
Still, if you familiarize yourself with what it takes to buy your first home beforehand, it can help you navigate the real estate market with ease. So let's get started! In this step-by-step guide, you'll learn what it takes to buy your first home from beginning to end. Whether it's your first time in the real estate market or you're an experienced homeowner who wants to brush up on their skills, this list has you covered.

Homeowners insurance is a contract that protects both you and your lender in case of loss or damage to your property. The contract is known as an insurance policy, and the periodic payment is known as an insurance premium. The monthly homeowners insurance premium is often included as part of the monthly mortgage payment, with the insurance portion of the payment going into your escrow account.


In a perfect world, I would love to get a 15 year fixed rate mortgage using a conventional loan where I put down 20% (avoiding PMI altogether) in a great neighborhood close to the city (but not too close) with a white picket fence, red door, and black shutters with a boatload of money in the bank to go with it. But here I am, writing about the process and not buying any homes – I’m just trying to pay off my student loans.
Whether it's the roof, water heater or furnace, aging home systems will need replacement. And that may end up being sooner than you’d like, especially if you didn’t pay close attention to the age and condition of the roof, plumbing, electric and heating and cooling systems when your inspector pointed them out. HomeAdvisor’s 2015 New Homeowner Survey found that 75 percent of homeowners face an unexpected emergency within a year of purchase. To expect the unexpected, Hunter points to the survey’s recommendation that homeowners plan to spend 1 percent of the home’s purchase price on unplanned repairs. Maintaining at least that much in your emergency fund will help keep you from dipping into other savings from year to year.
The spender in me knows that’s easier said than done. When my husband, Winston, and I moved into our first home, I had so many visions for what our home could look like! It was hard for me to accept the fact that I could only decorate one room at a time, but I knew our future money goals were more important than me spending all our savings at the furniture and home stores.
Speaking of mortgages, Gilmour recommends that payments generally not exceed 28% of your monthly gross income—but if you have other high costs, such as private school tuition, it can be wise to pare down this percentage even more. If you're not sure what's realistic, consider seeking help from a financial professional, who can help walk you through an appropriate breakdown, based on your individual situation.
Contingency clauses also offer a form of protection. "A mortgage financing contingency clause protects you if, say, you lose your job and the loan falls through or the appraisal price comes in over the purchase price. Should one of these events occur, the buyer gets back the money he used to secure the property. Without the clause, he can lose that money and still be obligated to buy the house," explains Justin Lopatin, a mortgage planner with American Street Mortgage Co., to MSN.

Once you've got your savings growing, your down payment set, and you are pre-qualified and pre-approved, start the search for your home. Begin by using sites like Zillow.com or Realtor.com to zero in on the home you want and the community you want to live in. Factor in key lifestyle needs -- like good schools, decent commute to your job, manageable property taxes, and ultimately, a home that has a good chance of appreciating in value if you ever want to sell it.


Mortgage insurance: If you take out a conventional loan and put down less than 20%, it’s possible you’ll have to pay private mortgage insurance, which protects the lender financially. You can typically request for PMI to be canceled once you reach 20% equity in your home. If you take out an FHA loan, you have to pay mortgage insurance, though you may be able to cancel your insurance once you pay down enough of your loan.
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.

Ask to be present during the inspection, because you will learn a lot about your house, including its overall condition, construction materials, wiring, and heating. If the inspector turns up major problems, like a roof that needs to be replaced, then ask your lawyer or agent to discuss it with the seller. You will either want the seller to fix the problem before you move in, or deduct the cost of the repair from the final price. If the seller won't agree to either remedy you may decide to walk away from the deal, which you can do without penalty if you have that contingency written into the contract.


Ask your real estate agent for information on crime rates and the quality of schools around your prospective neighborhoods. Calculate your new commute times to see if they seem manageable. Visit the neighborhood at different times and days to check for traffic conditions, noise levels, and if people are comfortable being outdoors. Only choose a neighborhood that you and your family feel good about.
What to do instead: Ask your real estate agent to help you track down neighborhood crime stats and school ratings. Measure the drive from the neighborhood to your job to gauge commuting time and proximity to public transportation. Visit the neighborhood at different times to get a sense of traffic, neighbor interactions and the overall vibe to see if it’s an area that appeals to you.
IRS Publication 530 contains tax information for first-time home buyers. Real estate property taxes paid for a first home and a vacation home are fully deductible for income tax purposes. In California, the passage of Proposition 13 in 1978 established the amount of assessed value after property changes hands and limited property tax increases to 2 percent per year or the rate of inflation, whichever is less.
Typically, purchase offers are contingent on a home inspection of the property to check for signs of structural damage or things that may need fixing. Your real estate agent usually will help you arrange to have this inspection conducted within a few days of your offer being accepted by the seller. This contingency protects you by giving you a chance to renegotiate your offer or withdraw it without penalty if the inspection reveals significant material damage.
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