f you are considering a home purchase, it will be a significant life achievement to finally close on your new house. With the rewards come tons of responsibilities, duties, and considerations that might make you feel overwhelmed and stressed. There are many things to be considered while purchasing a house: mortgage, legal tax, credit scores, down payment, insurance, etc. Since it's the most significant investment of your life, you cannot afford to go wrong.

We know you might be overwhelmed with buying a house and asking yourself, where do I start? What should I know beforehand? Don't worry. Here are 12 tips for the first home buyer so that you can buy your home with confidence.

Make Sure You Are Ready for Homeownership.

Home Ownership Checklist
Source: pch.vector (Freepik)

We know you have been waiting for this day, but the biggest mistake of homeowners is feeling rushed. Buying a house is a huge financial commitment, so you must know whether you are ready now or would be better off waiting a few years. Do not rush into purchasing a home because everyone else seems to be doing it or someone said you should.

Likewise, you shouldn't purchase a home because mortgage rates are cheap or the market is favorable to buyers. So, when should you start looking for your first home? You should only buy the house when you are mentally and financially ready. Ask yourself the following questions:

  • Is your financial situation stable?
  • Do you have a steady income?
  • Are your bills and credit score in order?
  • Have you saved enough money in your emergency fund?
  • Do you have sufficient funds for a down payment?
  • Can you afford the cost?
  • Are you ready to settle down?

If you have replied yes to the given questions, then chances are that you are ready for homeownership. But if you haven't, it's OK to wait for a few years.

Get Your Finances Ready Beforehand.

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A common mistake most first-time buyers make is obtaining house financing at the last minute. This may lead you to lose the house to someone who had funding beforehand. Getting your finances in order is crucial before you begin home hunting. This helps the seller see you as a serious buyer, gives you an upper hand in negotiations, and enables you to stay within budget.

Here are some pointers for obtaining mortgage financing:

  • Track and strengthen your credit score.
  • Pay your payments on time and maintain your credit card balance as low as possible.
  • Explore various loan options, such as a conventional mortgage, FHA, USDA, and VA loans, to see which fits you best.
  • Consider a 15-year fixed rate if you can afford the higher monthly payments. Otherwise, you can opt for 30 years year fixed rate mortgage.
  • Avoid mortgages with a variable or adjustable interest rate.
  • Obtain mortgage interest and closing costs from many banks and compare them. Never compromise when mortgage shopping.
  • Get preapproved on a mortgage before searching for a house.

Also read: How to improve your credit scores?

Remember the Closing Cost and Other Expenses.

The down payment and the purchase price are usually the first two things that come to mind when homebuyers think of the costs of purchasing a property. However, other expenses are associated, such as closing charges, move-in costs, legal fees, home insurance premiums, property taxes, etc. Most purchasers need to remember the closing fee they must pay on the property. Thus, while financing a house, you should also consider financing for these costs.

Check for First-Time Homebuyer Down Payment Assistance.

Money Assistance
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Being first always has perks, and so does being a first-time home buyer. Several programs help the first-home buyer in buying their first home. Funding for these initiatives is provided via various grants, loans, and other schemes. You must meet specific criteria, though, to participate in the program. These requirements vary by program, but here are some of the standard requirements:

  • A credit score of 620 or above is required.
  • You need to be a first-time buyer.
  • There is a minimum number of years of residency required (often 3-10 years)

You can determine whether you meet the program requirements by searching for them and figuring out if you are eligible. Why not try it when you save thousands of dollars from the program?

Know more about the programs here.

Select the Best Mortgage Lender.

Research Mortgage Lenders
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Finding the right mortgage lender might take a lot of work if you are a first-time homebuyer. Not only are there comprehensive options to choose from, but there are also fees, rates, and loan programs. You should choose the lender with the lowest mortgage rate and costs, but remember that this is one of many factors to consider. You should also consider customer service, availability, refinancing options, prepayment penalties, etc. Also, since you will deal with the mortgage lender for the long term, make sure you choose the one you can easily access and are comfortable with.

We know how challenging it can be to find a mortgage lender. So, to help you choose the best option, we've compiled a list of some of our favorites:

Make a Homebuying Wish List.

Home Checklist
Source: Jcomp (Freepik)

Just as you would prepare a list of things you need before going grocery shopping, you should also make a list of things you want before going house hunting. This helps you understand what you are looking for. Answer these questions to know what to look for in your house hunting:

  • What type of house do you want to live in? (e.g., apartment, one-story, duplex, condos, townhouse, etc.)
  • Do you want a newly built home or an old home?
  • How many bedrooms do you need?
  • How many bathrooms do you need?
  • Do you need an enclosed garage?
  • Do you need a backyard?
  • What is your budget?
  • Do you have to be close to public transportation?
  • What part of the town do you like to live in?
  • How much of the renovations are you willing to do?

Thus, make a list addressing what type of house you want, what features you can compromise on, and what you cannot.

Work With a Real Estate Agent.

Real Estate Agent
source: upklyak (Freepik)

Another common mistake is that most home buyers try to purchase a home independently to save on the commission fees. But by doing so, you might lose a lot of money instead. A real estate agent has unparalleled expertise in the housing market. So, having them by your side will help you find your dream home. However, ensure your listing agent does not represent both buyer and seller. The primary reason for hiring a buyer's agent is so that they can counsel, protect, and advise you. A listing agent's allegiance is with the seller, so if you deal with a dual agent, you may get advice that isn't in your best interest. In addition, verify that they have been active in the business for at least two years.

Also read: How to find a good realtor.

Don't Buy More Than You Can Afford

While house shopping, you might be tempted to buy a house that is slightly off your budget. But DON'T! Initially, look for the place you can afford, not the one you want. If you are a two-income household, buy a house using just one income. This way, you can save money for your emergency and future expenses, such as your child's education.

Don't Fall in Love With the House.

How to Negotiate
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We all have a dream house. But, just as they say that first love doesn't last, neither does your first home. Most Americans move every six to ten years, and the typical homeowner will have three homes over their lifetime. Thus, prioritize your necessities above your desires while looking for your first house. And remember that it's OK to compromise on the things that aren't absolutely necessary.

A Home Inspection Is a Must.

Home inspections are vital when purchasing a property. It's your right as a buyer to inspect for damages and issues with the house. You can renegotiate the price if the inspection finds substantial damage or get out of the deal altogether. Thus, hire a home inspector who will thoroughly inspect your home and look for potential problems with the house.

Apart from this, make sure you do a thorough title search. In this manner, you may avoid any legal complications by determining whether or not the property is subject to the lien. Also, have a look at the surrounding neighborhood. Check the local crime statistics and keep an eye out for upcoming construction.

Arm up for the Negotiation Battle.

Two Men Shaking Hands
Source: Storyset

Get ready for the negotiation battle with the seller. Most first-time home buyers are swayed by emotions in this process and are afraid of negotiation since they feel they might lose the home if they bargain a lot. But don't be afraid to negotiate. Use the following tactics to close the negotiation in your favor:

  • Have a preapproved mortgage so lenders perceive you as a serious buyer, not someone who wastes their time.
  • Don't act as if you have fallen in love with the house and are desperate. Act as if you have several options.
  • Use the art of the counteroffer.
  • Learn more about sellers and why they are selling the house. You have the upper hand in negotiation if they are trying to sell quickly.
  • Compare the house price with similar property.
  • Walk away if you cannot strike the deal.

Studying the home market's trends is important before sitting down to negotiate. If there are many buyers and fewer sellers, then it's tough to drive a hard bargain. Work with your real estate agent to prepare and strategize for the negotiation.

Also, read 10 Tips On How To Negotiate A Home Purchase

Buy Adequate Home Insurance

Researching an Insurance Policy
Source: Redgreystock (Freepik)

After all the effort to take these steps, you must protect your home from potential uncertainties and risks. Before closing, your lender will require you to buy a home insurance policy. Thus, while you are at it, don't choose an insurance policy solely for the formality. Make sure you have purchased enough home insurance to protect your house in case a disaster damages it. Here are some things to keep in mind:

  • Make sure that deductibles are on your budget.
  • Be aware of exclusions.
  • Buy additional coverage if the homeowner insurance is not enough.
  • If your house is considered high-risk, don't worry, you can purchase high-risk home insurance.

We know you might be unsure where to shop for home insurance. So, here are some of our top picks:


Buying your first home can be a rewarding as well as stressful experience. A common mistake most first-home buyers make is to feel rushed, saving for a down payment only, falling in love with the house, and buying more than they can afford. Buying a home is expensive, so you can't afford to go wrong. But, with the correct information and tips, you can easily buy your first home with confidence.


Dec 5, 2022

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