First Home: 13 Essential Tips for Buying for the First Time

a victorian property in a London street with rose bushes
Featured Partner Post

You’ve been dreaming about this moment for years, haven’t you? Flipping through real estate news, imagining your perfect kitchen, envisioning your life in a space that’s truly yours.

The path to buying your first home is thrilling but also a bit intimidating, right? But don’t worry, you’re not alone. Here are some essential tips you wish you had known sooner to guide you through the milestone of buying for the first time. 

If you’re moving or considering it, especially if it is moving from somewhere like BC to Airdrie, you might find this resource incredibly helpful:

Let’s dive into what you need to know to make your home-buying process as smooth as butter.

Buying for the First Time

Buying your first home is an exciting milestone. It’s a sign of financial independence, stability, and perhaps even the start of a new chapter in one’s life.

However, the process of buying for the first time is also one of the most significant financial decisions most people will ever make. It involves a myriad of complexities, ranging from mortgage qualifications to navigating potential pitfalls in the property market.

As such, being well-informed and prepared as a first-time buyer is not just advisable, but essential.

1. Know Your Budget

a small living room with corner sofa and floor to ceiling bookcases
Create the space you always wanted with your first home 🙂

First off, you need to know how much you can actually afford. A budget isn’t just a number you pull out of thin air; it’s a carefully calculated figure that should cover not just the purchase price of your home, but all the other expenses that come along with it.

You need to assess your current financial status which will include: 

  • Income
  • Any other regular income such as bonuses, commissions, and investments
  • Savings
  • Expenses – utility bills, car payments, insurance, existing loan payments, groceries, nights out, and entertainment. 

This helps ensure that your decision is based on your actual financial health, and you can approach buying your first home with clarity and confidence.

2. Factor in Other Costs Like Closing Fees, Maintenance, Etc.

But wait, there’s more! Your budget needs to cover more than just the sticker price of the house. You’ve got things like closing costs, which can include attorney fees, title insurance, and other fun expenditures you probably never knew existed.

And don’t forget about property taxes, homeowner’s insurance, and potentially even private mortgage insurance if your down payment is less than 20%. Oh, and you’ll definitely want to budget for some maintenance and repairs because, let’s face it, stuff breaks.

3. Check Your Credit Score

Moving on to your credit score; this little three-digit number is like your financial report card, and mortgage lenders take it very seriously.

A high credit score could get you a lower mortgage rate, which means more money in your pocket in the long run. So, if you haven’t checked your credit score yet, now is the time.

Steps to Improve Credit if Needed

There are steps you can take to boost your credit score. Start by checking your credit report for any errors. If you find any, dispute them.

Next, work on paying down high-interest debt and try to keep your credit card balances low. Every little bit helps, and improving your credit score could mean the difference between landing your dream home and settling for second best.

4. Save for a Down Payment

This is the big chunk of money you’ll need upfront to secure your first home. So how much should you save? Well, the general rule of thumb is at least 20% of the purchase price.

However, many first-time buyers can’t cough up that much, and that’s okay.

Options for First-Time Buyers

Luckily for you, being a first-time buyer comes with some perks. Various programs offer down payment assistance or allow you to put down less than the traditional 20%.

Some options include FHA loans, VA loans, and even some state-specific programs designed just for first-time buyers like you. Just be aware that a smaller down payment might mean you’ll have to pay private mortgage insurance until you’ve built up enough equity in your home.

5. Pre-Approval for a Loan

What’s next? Getting pre-approved for a mortgage loan. Why, you ask? Because this pre-approval letter from your mortgage lender is like your golden ticket in the world of home buying.

It tells sellers you’re a serious first-time buyer, and it gives you a concrete idea of what you can afford, taking a lot of the guesswork out of the process. Once you find a home and make an offer, having a pre-approval can speed up the mortgage process. Since the lender has already reviewed your financials, they can move more swiftly toward final approval.

The pre-approval process requires a hard check on your credit and a review of your financial documents. If there are any red flags or areas of concern, it’s better to address them early on rather than during the final stages of a home purchase.

Some lenders offer an interest rate lock with their pre-approval, ensuring that if rates rise while you’re house hunting, you’ll still be able to borrow at the lower rate initially offered. However, this is subject to terms and conditions and may be time-sensitive.

Difference Between Pre-Qualification and Pre-Approval

Before we go any further, let’s clear up some confusion. Pre-qualification and pre-approval are not the same things. Pre-qualification is an estimate of what you might be able to borrow, usually based on a quick conversation and some basic financial information.

It’s a good starting point, but pre-approval is where the real magic happens. To get pre-approved, you’ll need to provide more detailed financial information, and the lender will actually verify your credit and financial status. So, when you wave that pre-approval letter around, it holds a lot more weight.

6. Choose the Right Location

a Georgian street in London in autumn
Location, location, location

You’re not just buying a property; you’re investing in a neighborhood. Think about your daily life—how close do you want to be to work, schools, shopping, and other amenities? Remember, a shorter commute doesn’t just save time; it saves money.

Here’s how to evaluate various aspects of a neighborhood before buying a property:

  • Crime Statistics: Many online resources and local police department websites provide detailed crime statistics for specific areas.
  • Neighborhood Walk: Walking around the neighborhood, especially in the evening, can give you a feel for its safety.
  • Community Watch Programs: Areas with active neighborhood watch or community policing initiatives often have residents who are proactive about safety.
  • Local Planning Department: Visit or check the website of the local planning or zoning department. While some developments, like parks or quality schools, can boost property value, others, like factories or high-rises, might not be as desirable.
  • Traffic and Infrastructure: New developments can lead to increased traffic or strain on local utilities.
  • Demographics and Culture: Understanding the demographics can give insights into the community vibes. Is it a young neighborhood or more retirement-oriented? Is it diverse or more homogenous?
  • Local Amenities: The presence and type of local amenities (cafes, parks, gyms, and cultural centers) can offer clues about the neighborhood’s vibe.
  • School Quality: For families with or planning to have children, the quality of local schools is crucial.
  • Public Transport: If you rely on public transport, check the frequency, reliability, and proximity of services.

[mailerlite_form form_id=7]

7. Considerations for Future Resale Value

But hey, let’s not forget about the future. Even though you’re super excited about your first home, chances are you’ll move again someday. So, think about the home’s potential resale value.

Is the area growing? Are there plans for new amenities, like a park or a shopping center? These can all be big selling points down the road.

Even if you plan to stay long-term, it’s wise to consider the future resale value. A neighborhood’s reputation, growth trajectory, and amenities can influence this.

8. Make a Wishlist

Alright, it’s time to dream a little! But let’s keep our feet on the ground, too. Make a wishlist of what you’d love in your ideal home and separate that list into “needs” and “wants.”

You also need to consider future needs when buying for the first time;

  • Even if you currently don’t have children or have just one child, consider how many you might have in the future. It’s also useful to have extra rooms for potential guests.
  • If you anticipate needing more space in the future, check if the property allows for expansions, like adding rooms or building upward.
  • Research the local schools in terms of quality, ratings, and proximity. Even if you don’t have kids yet, being in a good school district can boost your home’s resale value.
  • With the rise in remote work and home businesses, having a dedicated office space or a room that can be converted into one is crucial.
  • As you age, navigating stairs can become a challenge. Consider ranch-style homes or those with at least one bedroom and bathroom on the ground floor.
  • Even if you currently don’t own a car, consider whether you might in the future. If you already have a vehicle, think about the possibility of needing more space as your family grows.
  • Consider what amenities, like gyms, cafes, or theaters, are essential to your lifestyle and check if the neighborhood offers them.
  • If there’s a possibility of a job change or if multiple members of the household work in different areas, consider the home’s location in relation to potential workplaces.

Knowing what your future needs might be can help you make smarter choices, especially when you’re weighing different properties.

9. Flexibility and Deal-Breakers

Be ready to compromise, but know where to draw the line. For instance, maybe you can live without that backyard swimming pool if the home is in the perfect school district.

But if a one-car garage is a deal-breaker because you have multiple vehicles, stick to your guns. Being flexible is great, but you also don’t want to end up with a home that doesn’t suit your basic needs.

10. Hire a Real Estate Agent

Have you thought about hiring a real estate agent? These people are the experts for a reason. They can help you find listings that match your criteria, arrange showings, and navigate the often-confusing world of offers and contracts.

Plus, they’ve got the insider scoop on the local market, which can be a game-changer in a competitive environment.

Questions to Ask When Hiring a Real Estate Agent

However, don’t just go with the first agent you find online, do your due diligence. Ask them about their experience, especially with first-time buyers.

  • How familiar are they with the area you’re interested in?
  • What’s their availability like?
  • Read online reviews and ratings. 
  • Ask friends, family members, and coworkers for recommendations. 
  • Check licenses and disciplinary actions.
  • Experience matters – A realtor who has been in the business for several years has likely seen various scenarios and market conditions.
  • Look at their listings online. Do the properties match your criteria in terms of price, location, and type?

The answers to these questions can help you find an agent who’ll be a great fit for you.

11. Home Inspection is a Must

a living room with TV above the fireplace

This step could save you from a world of hurt down the road. A home inspection will cover everything from the foundation to the roof and can identify potential issues that could become major headaches later on.

Red Flags to Look Out For

  • Check for visible cracks in the foundation.
  • Look for uneven or sagging floors.
  • Doors and windows should open and close smoothly.
  • Check the age and condition of the roof.
  • Look for missing or damaged shingles.
  • Check for signs of leaks in the attic.
  • Inspect the siding for damage or rot.
  • Check for peeling paint, which can be a sign of moisture issues.
  • Ensure proper grading, so water drains away from the home.
  • Ensure the electrical panel is up to code.
  • Check for exposed wiring.
  • Test all outlets and light switches.
  • Look for signs of leaks or water damage.
  • Test all faucets and showers for proper water pressure and drainage.
  • Check the condition of the water heater.

These are red flags that could mean costly repairs in the future. If significant issues come up, you can either negotiate for repairs or even walk away from the deal. Which brings us to our next point.

12. Negotiate Wisely

Negotiating can be nerve-wracking, but remember, almost everything is up for discussion. Whether it’s the price, closing costs, or repairs needed, don’t be afraid to make your case.

When to Walk Away from a Deal

Know when to hold ’em and know when to fold ’em, as they say. If there are too many red flags, or if the seller is unwilling to budge on critical issues, it might be time to walk away. There are plenty of fish in the sea, or in this case, homes on the market.

13. Closing the Deal

You made it! You’re at the finish line. But before you can call that house your home, there’s the closing. This is when you’ll sign a mountain of paperwork, but don’t worry, your real estate agent and the mortgage lender will guide you through the process of buying your first home.

Closing Costs

Before you sign anything, do a final walkthrough of the property to make sure everything is as it should be. Then, be prepared for closing costs, which will include things like loan origination fees, title insurance, and more. Once that’s all squared away, the keys are yours!

13 tips, although unlucky for some, should get you well on the way to buying for the first time. From setting a budget to doing final walkthroughs, buying your first home is nothing short of an adventure. It’s a rollercoaster of emotions, negotiations, and, yes, paperwork.

Remember, every homeowner was a first-time buyer once, clueless and overwhelmed.

But with the right guidance, a solid game plan, and maybe a little help from real estate agents and mortgage lenders, you’ll cross that finish line with keys in hand and a smile on your face as you walk into your first home.

Disclosure: Some of the links above are affiliate links, meaning that at no additional cost to you, I will receive a very small commission if you click through and make a purchase. These links help to pay the editorial costs of writing a blog. For more information, please read my full affiliate disclosure here.

I also use Artificial Intelligence Image generators to create some of my images. These are to show you examples of my ideas and inspiration when I cannot produce the real images myself.

[mailerlite_form form_id=7]

First Home: 13 Essential Tips for Buying for the First Time Pinterest pin

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *