A Complete Advice for First-time Homebuyers

first time home buyers

First-time homebuyers feel out of this world. It’s a moment of celebration and signals growth. It is also a moment of mixed feelings of excitement, stress, and a little bit of sadness when departing old homes, full of fond memories. These are normal feelings as the process is very emotional. But, the more one is emotional, the more at risk of making buyer mistakes. As the road to ownership can be bumpy, planning to buy a house for the first time is a big task.

1- Tips For First-time Homebuyers

So, here are six tips to help anyone buying for the first time to stay on track.

i- Credit Score

The credit score is the first place to understand. Applying for mortgages is usually considered with the credit score. But, lenders go even further to review the whole credit report for first-time homebuyers. They can evaluate their financial health with such details as payment habits and balances from the credit score report.

Lenders determine the interest rate the one applying is eligible for by getting a deep understanding of the person applying. Clearly speaking, better credit scores will get lower interest rates. So if you want the best possible interest rate, review the credit report and adjust habits to portray optimum levels of activity and finances.

ii- Budget Planning

Finances are sensitive to planning. Carefully review finances monthly, in particular income and debts. Planning finances to prevent defaulting in the future and setting a budget can enable you to measure optimally, and this way, one can get a feel of how much they can spend and earn in a month.

First-time homebuyers should review houses five times the total household revenue or income. However, if 20% or less goes towards clearing debt, it’s a good idea to view homes that are not more than 4 times the total household income. If more than 20% goes towards debt payment, it’s best to look for houses that are 3 times the total income. 

iii- Always Save

Saving for the downpayment is a smart move, especially for first-time homebuyers. It usually takes more than 6 years for the average American buyer to save up a 20% downpayment.

So, it makes sense, right? Consider using dedicated savings account for homebuying costs. Additionally, examine your budget. Cut back on areas that you can identify. And put those savings in a high-yielding saving account. The savings account will help grow your funds fast and help with the downpayment when the time comes.

2- Hidden Costs First-time homebuyers Should Know

Hidden costs are those costs that pop up once ownership takes place. Once in your home, you are responsible for costs other than the mortgage payments. These include insurance, utilities, property taxes, HOA fees, insurance, and additional costs related to repair and costs. So, first-time homebuyers should always keep in mind these expenses when intending to buy a home.

3- Pre-approval is a Requirement

Lenders show you a letter called a pre-approval letter. The letter shows you have approval for the mortgage. Always include the pre-approval letter in offers and display your seriousness in buying. It is documentary proof that the person can afford the property and maybe help win bidding wars.

4- FHA, USDA & VA Loans Meant for First Time Homebuyers

The said loans are programs for first-time homebuyers. These are great to consider if you can only afford a small downpayment. As these require minimum payments and depending on the credit score, buying a home can become affordable. VA loans are reserved for military personnel, veterans, and spouses.

Regentology Connects First-time Homebuyers to the Best Buyer Agents

Acquiring a dream house can be overwhelming. That’s why Regentology connects you to the best buyer agents in the area. Our professionals understand that getting the best mortgage rates can save thousands of dollars. Fill out the form and our mortgage officers will contact you as soon as they can. Let us handle the stress!


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