10 Tips for First-Time Homebuyers
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1. Know Your Credit Score
2. Consider Getting Preapproved for a Home Loan
3. Stick to Your Price Range
4. Consider How to Deal With Your Down Payment
Buying in 1-3 years. If you’re planning to buy in the immediate future, accessing your money quickly could be beneficial. This is when a savings account or a cash management account could be a good fit. Buying in 5 years. If you want to purchase a home five years down the line and want higher returns than a traditional savings account, investing in CDs could be a good fit. Buying in 5-plus years. Some people may consider investing their down payment savings, but that is a highly individual decision.
5. Work With an Agent Who Knows What You Want
Experience in and knowledge about the area where you want to move. Availability. Do they have a huge client roster, or will they be able to give you personalized attention? Communication style. Specialty. Do they primarily work with buyers or sellers?
6. Avoid Hard Credit Inquiries
Applying for a car loan Applying for a new credit card Requesting a credit line increase
7. Look Into First-Time Loans and Programs
Federal Housing Administration (FHA) loans appeal to buyers wanting to make a down payment as low as 3.5% and who need flexible credit qualification. Just be aware of the FHA loan upfront mortgage insurance premium and annual premiums. The Good Neighbor Next Door program offers law enforcement officers, teachers, firefighters, and emergency medical technicians a chance to buy a property up to half off its list price. Loans from the U.S. Department of Agriculture help low- and moderate-income households qualify for a home with no down payment in an area the department recognizes as rural. State or city programs. Depending on where you want to buy, you may qualify for a program through your city or state, translating to a lower interest rate, smaller down payment, or down payment assistance.
8. Budget for Closing Costs
9. Inspect, Inspect, Inspect
10. Don’t Be Afraid to Negotiate
Repairs. From creaky doors to peeling paint, a buyer can ask the seller to make updates. New appliances. If the furnace is on its way out, the buyer can ask that the seller replace it before closing. Personal items. While appliances are typically included in the sale, you can ask the buyer to include furniture, art on the walls, or other personal belongings in the home. Home warranty. A buyer can ask the seller to buy a home warranty to cover repair or replacement of particular home systems or appliances, typically for a year at a time.
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