It's already complicated buying a home. Buying your first home can be even more so. There are plenty of guides available for first-time homebuyers to offer advice throughout the journey, but before you get started, there are some key things you can do to prepare. Here's a list of the best things to do before you start actively searching for your first home:
Save for a Down Payment
One of the biggest expenses to plan for in buying a home is the down payment. If you opt for paying a larger down payment, you won't have to borrow as much for your mortgage. Larger down payments can also have additional benefits, like securing better interest rates or other favorable terms. Plan to save up enough money to cover a down payment of around 3% of the purchase price and you'll be in great shape to buy your first home.
Find an Agent
A buyer's agent will improve and streamline your entire buying experience. A real estate agent will represent you in negotiations and help you with your home search. Their access to special resources and their professional expertise can broaden your possibilities and help you find homes for sale that aren't on the major search portal sites. Working with an agent you trust will take a lot of the anxiety and frustration out of buying your first home.
Get Mortgage Pre-Approval
Finding the right mortgage lender and getting pre-approved for a loan is crucial to the home buying process. A pre-approval serves as proof to sellers that you're financially responsible enough to pay for the house. It also shows that a financial institution has vetted you for things like your credit score, debt-to-income ratio and other factors. Shop around for a mortgage lender before you begin your home search and you'll know how much home you can afford while also improving your chances of a seller accepting an offer.
Buying your first home is a major life event, but it doesn't have to be overwhelming. Use this simple list to prepare yourself for the process and find your dream home.
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