Are you planning on buying a home for the very first time? This is a scary and exciting thing to do because you are finally getting a place that can be your very own. No more crazy rentals (because I know we have all lived in some ridiculous ones at times) or living under your parents roof.

This is probably one of the biggest financial moves anyone can take, but I promise it is all going to be worth it.

This was quite the process for us especially because we never were able to fly out and see our house before buying it (we are moving across the country). We had to do everything remotely and I was so thankful for a great realtor that was thorough and a great communicator.

So before you jump into this, take a look at these 10 tips for anyone buying their first home.

1. Save for the down payment

As soon as you start considering purchasing your own home, start saving! This is huge because what holds many individuals back from buying a home is the initial upfront costs. 

The sooner you start saving, the sooner you can be putting your money into something that you own instead of paying it to relentless landlords. 

Generally, a 20% down payment is what it will cost, but there are programs out there that you can do a down payment as little as 3.5% or perhaps even less (check those out next). 

Even though it sounds super appealing to only put a small percentage down, I would caution you that there are going to be other fees that apply until you reach that initial 20%. In the end, after discussing the possibilities with your loan agent and realtor you should do what is best for you and your situation. 

2. There are first time home buyer programs

The down payment will likely be the biggest cost of buying a house and it can be a lot of money to come up with. There are federal and local programs out there to help you and still make your dream of owning a home a reality. Make sure to check them out. 

FHA loans: The Federal Housing Association can be a great option if you are needing a lower down payment. They are as low as 3.5%, but you will have to pay a monthly home mortgage insurance. This can also be great if you have a low credit score.

USDA loans: The Department of Agriculture is best for anyone looking to buy a home in a rural area. There is no down payment required, but you would have to pay an annual fee instead of the mortgage insurance.

VA loans: The Department of Veterans Affairs has a loan program for those who have served in the military and allow for 100% financing. This means no down payment needed.   

3. Find a realtor agent perfect for you

They are professionals there to guide you through this whole new process. Of course, you can be looking at houses on your own and checking out pictures, but when it comes time to be serious you should make sure you have a great agent by your side. They will coordinate inspections and help you get the best offer through negotiating on your home.

I was honestly so happy with our realtor and I knew that she had our best interest in mind. She was 100% our advocate to success and kept reminding us that if it is right then it will all work out. 

4. Get more than one mortgage quote

Once you start looking into buying, you won’t be able to do much without a loan. It requires a lot of paperwork including tax returns, W-2 forms, proof of funds for the down payment, etc. 

Because there is so much required to meet with one lender, it can be daunting to do that paperwork over again just to get another quote. 

Something we did was get with a mortgage broker because their job is to give you options from a variety of lenders. Ultimately, you need to pick what is best for you. 

5. Get a pre-approval letter

Your lender will give you a “pre-qualification” letter that is an estimate of how much they will give you based on your financial situation.

You need to get another letter that states you are “pre-approved” not just “pre-qualified.”

When you are getting serious about a home, having this letter ahead of time will help for a smoother and quicker process. It confirms in writing how much the lender is willing to lend you and terms that apply. 

6. Really consider your budget

What can you actually afford as a mortgage? Also, consider other expenses you will have such as home insurance, home warranty, or any other fees.

Be honest with your realtor agent about what you can afford because they are going do their best to find the perfect house for you that will meet the budget you have. 

When we started looking into houses, we got really excited and we tended to look at houses that fell out of our price range. We almost got ourselves into a real problem after putting an offer in on a house we felt was too expensive for us to manage. Luckily, it all worked out in the end and we did find the house for us for the best price.

7. Budget for closing costs

There are a lot of expenses that will not be calculated into the down payment that you are also going to be paying up front.

After the seller knows you are serious about buying this house and you have paid your due diligence and earnest money (each state can be different on these costs), you will be responsible for a home inspection, pest inspection, appraisal, etc.  

Your lender will let you know about how much closing costs will be, so keep that amount to the side so you are able to cover them.

8. Don’t make big purchase while trying to close

I know it can be tempting. Perhaps you want to start buying all the new furniture and appliances to put in, but I caution you to think before you spend.

Like talked about previous, there are a lot of unseen closing costs when buying a home and it would be unfortunate if you weren’t able to pay for one because you just bought that new couch.  

Also, the underwriter will be checking your credit score during the closing process to be sure that it has not changed since you were pre-approved. If you hurt your credit score by increasing your debt, you could result in your loan’s interest rate increasing or have your mortgage application rejected. 

9. Negotiate before you buy

If you are anything like me then you don’t know how to negotiate, especially when it comes to the price of a house. This was a point that our realtor helped us the most because she had done this a million times. She talked us through what was best to offer and counter offer, so we ended up getting the house for less. 

There is more to negotiate than just the price of the house because after the inspection goes through you can ask the seller to make repairs before closing or give you a credit to fix it yourself after closing.

You can negotiate sharing the cost of closing with the seller. This doesn’t guarantee that you will get it, but it never hurts to try. In our situation, there were repairs to be made but the seller wanted to get out quickly. Instead of them paying us directly for the repairs, they paid for a portion of our closing costs. 

Even though difficult, this small piece of advice will save you thousands of dollars on your home.

10. Always ask lots of questions

This is a new experience for you and perhaps your family. The home inspection is a great time and place to ask questions about the home because you want to make sure that things are in proper working order before you buy and move in. 

If you want something inspected specifically then don’t be afraid to let the inspector know about those concerns. 

Ask your agent questions! They will be going through this whole process with you and they have done it millions of times. Whenever I didn’t know what something meant I was asking my agent because I wanted to understand. 

Asking questions and gaining understanding will lead you to making better decisions and overall a more successful experience in buying your first house. Good luck!