Buying your first home is an emotional roller coaster. You will feel worried, stressed but also happy. There are many essential things in this process, and sometimes can be very complicated. If you keep everything under control, that won’t happen to you. In case you don’t know anything about first-time house buying tips, we’re here to guide you. Do not worry!

Once you enter the world of house buying, your first thoughts will be positive; you will think about decorating the house, choosing the right room for everything, and then when you got that all together, you will start to worry about the payments, the cost of everything and how this whole process will go.

First, let’s discuss the first-time homebuyer mistakes you will need to avoid when purchasing your first home. Let us take you through this process.

First-time homebuyer mistakes to avoid:

  • Searching for a home before applying for a mortgage
  • Taking the first offer
  • Talking to only one lender
  • Draining your savings
  • Not negotiating a home buyer rebate.
  • Being careless with credit 
  • Listening to our emotions instead of our brain
  • Miscalculating the hidden costs of homeownership
  • Doing everything too fast.

Now that we know all the most common mistakes that first-time homebuyers do let’s find out the tips that will help you in the home buying process. This way, everything will be more calm and comfortable, and as a first-time homebuyer, I think you want that.

Top 10 tips for first-time homebuyers

#1 Check your credit

Before you even start purchasing a house, check your credit. This way, you will know the limit of how much you can spend on your first home without bringing yourself into financial problems.

#2 Pay off all debt & Build an emergency fund

Were sorry to tell you but owning a home is expensive, it won’t be all decorating and house parties with your friends. You may think, “If I buy a house for the same monthly amount as I’m renting my apartment now, it will be the same,” unfortunately not. Even if the house that you’re planning on purchasing is the same price as your monthly rent, it won’t be the same because once you’re a homeowner, you have to pay many other things too not only the price of the house, you will be responsible to all the maintenance and upkeep costs. That’s why it would be much better if you’re debt-free and have an emergency fund by the time that you’re buying your home.

#3 Draw the line at how much house you can afford

Houses with giant stairs, a big garden and with a pool are like a dream, we know! But before you start to have some attachments or to feel for a house, it’s better to know your budget and what you can afford. This way, you won’t get disappointed or sad by not being able to afford a house you already saw or visited.

NOTE: Search for a mortgage calculator on the internet that will calculate your income and how much you will pay monthly for your new home (don’t forget about homeowner’s insurance and taxes).

#4 Don’t skip the preapproval step!

You can get all too excited about buying a new house and forget about this step, but keep it in mind because it’s vital. Before hunting for the perfect home, get a mortgage preapproval. Also, it would be good to know the difference between a prequalification letter and a preapproval letter.

Prequalification and preapproval letters refer to a letter from a house lender that specifies how much that lender is willing to lend you. These two letters provide useful information but are not 100% guaranteed loan offers.

Prequalification letter – is an estimate of the amount of home loan you can get. It’s based on an informal evaluation of someone’s (your) income and more other info.

Preapproval letter – is a document from a lender that tells you exactly how much loan money you will get. It’s based on your financial info. (W-2s, bank statements, credit scores, income).

#5 Save a “down payment.”

What is a down payment? Let us explain it to you. If you’re not able to save up the total amount of your new house in cash, you should at least consider saving up a down payment of 20-30% or even more, so you won’t have to pay for private mortgage insurance (PMI). First-time home buyers often make the same mistake; they search for programs that offer single-digit down payments but don’t use them. In an extended period, it will cost you more, and it’s not convenient.

#6 Understand your loan options

If you didn’t know yet, there are multiple types of mortgage loans, and we’re here to show you some of the most familiar types of them.

FHA loans – can allow you to buy a house with less strict financial/ credit score requirements. (3.5% down)

Conventional loans – with this loan, you can purchase a house with as little as 3% down.

USDA loans – are usually for people who want to buy a home in a qualified ruler area. (0% down).

VA loans – are exclusively for veterans and members of the armed forces (0% down).

#7 Closing costs, what?

Yes, you read it right. There are other costs than only your house’s price. Don’t think that your only down payment is the only thing you will need to close on your mortgage loan; you need to cover your closing costs too. But what are they?

Closing costs – are expenses that go to your lender in “exchange” for arranging certain loan services.

#8 Real estate

Working with a real estate agent is the golden way to find the perfect home for you/ your family. How can they help you? They will show you the best properties that fit your budget and your needs, help you decide how much to offer for a property, submit an offer letter (on your behalf), and help you negotiate with the seller.

#9 Save copies of the paperwork (physical) 

Never forget about the paperwork once it comes to buying your first home. Ensure that you’re saving physical copies of them so you will always have evidence of every important thing, and you may need them in the future for many things.

#10 Neighborhood

The last tip is not about finances and credits. It’s a tip for you to help you find the perfect home for you and your family. Before buying your first house,, don’t only look at the outside and inside your home; research the neighborhoods. You may find the perfect looking place, but if the area is not the best or the closest to anything you need, then you may consider taking a look at other homes in a more friendly community that is closer to the hospital, your work, the park, etc.