Home Approach

How to close on your first property and accelerate your journey to financial freedom

So, you’re thinking about buying a home for the first time. That’s great news! From increased financial security and tax benefits to having a permanent roof over your head and being part of a local community, there’s a lot to like about becoming a homeowner.

If you’re looking to achieve long-term financial independence, a home purchase is one of the smartest investments you can make. According to a recent study from the Federal Reserve, U.S. homeowners have a median net worth of $255,000. Renters, on the other hand, have a median net worth of just $6,300 — a difference of 40x!

While the benefits of being a homeowner speak for themselves, the process of buying your first home isn’t exactly a walk in the park. Truth be told, the experience can be downright crazy and filled with emotional ups and downs.

To make your journey easier, we’ve put together this comprehensive guide that outlines everything you need to know about becoming a first-time homebuyer, including:

• How to think about financing your first home
• The pros and cons of working with a real estate agent
• What to look for in a property
• Tips on negotiating a deal
• What to expect after an offer is accepted
• Hidden homeowner costs to consider
• Unforeseen challenges you might encounter
• First-time homebuyer mistakes to avoid
• Additional resources that can help you throughout the process

Buying your first home: The home loan financial component

There are two main types of loan programs available when it comes to mortgages, and you’ll want to determine your eligibility. First, conventional loans are the most common type of loan, and are not backed by the government. Then there are non-conventional loans which are backed by the government. Much more details on the differences between the two a bit later on.

Whether you’re buying a house for $2 million or $400,000, you should aim to have at least 20% of the purchase price upfront for a down payment. The remaining balance of the home price is the loan amount you are requesting. Having at least that 20% up front will enable you to avoid paying for private mortgage insurance (PMI), which most mortgage lenders require when buyers put down less than 20%.

While it’s possible to procure a home with as little as 3% down payment via the 97% loan-to-value mortgage program or 3.5% down payment by taking out a loan from the Federal Housing Authority (FHA), doing so is unadvisable, since PMI can cost as much as 2.5% of your total mortgage.

Of course, it never hurts to put down more than 20% if you have the money. The more money you put down, the lower your monthly loan payments will be.

For example, if you put down 20% on a $500,000 house and obtain a 30-year fixed mortgage at 4%, your monthly payment would be $1,910 (excluding property taxes and insurance). If you buy that same house with the same mortgage rate but only put down 10%, the payment increases to $2,148 per month (again, excluding property taxes and insurance). Plus, you’ll also be on the hook for PMI!

If you were to put down 30% in this same situation, however, your monthly payment would decrease to $1,671. You get the gist.

Tips for saving for a down payment on your first home

Saving up for a down payment can be a massive undertaking for first-time homebuyers. Here are some tips to make the process easier.

Set a goal

First things first: Know your price range. You need to figure out how much you need to save up to begin with. Again, the smart play is to have enough cash that you can put 20% down towards your home loan, while still being able to afford closing costs and living costs after that. Study your finances, create a budget, determine what your ultimate goal is, and develop a plan that helps you get there.

Cut unnecessary spending

Once you’ve figured out how much you need to save, it’s time to trim the fat off your budget. Do you really need subscriptions to Hulu, Netflix, and AppleTV? Or might you be able to get rid of one of them? Instead of going out for dinner, you might want to plan on cooking more meals at home. And instead of splurging on new clothes, maybe you can ride your wardrobe for another year. Wherever you can cut unnecessary spending, strongly consider doing so.

Optimize your savings

If your money is going to be parked away in an account while you save for a house, you might as well get the biggest return on it. Rather than putting your money in a regular savings account that generates paltry interest, consider a high-yield savings account (HYSA) instead where you’ll earn a lot more.

Set up automatic deposits

Planning to save for a down payment is one thing. Actually doing it is quite another. If you’re serious about saving for a down payment for your first house, consider creating a new bank account (or HYSA account!) and automatically routing something like 5% or 10% of each paycheck there. That way, you get the peace of mind that comes with knowing you’re building up your down payment without having to manually move money.

Pocket any windfalls

Win the lottery? Inherit some money? Win your fantasy football league? Get a huge bonus at work? Any money you receive from windfalls like these should automatically be routed to the account you’re stockpiling your down payment in.

Popular mortgage options for first-time homebuyers

Assuming you don’t have enough money to buy your first home with cash, you’re going to need to secure a mortgage. As you begin exploring your options, you will likely come across a number of government-backed loans, including VA loans, which help active duty military and veterans secure properties; and USDA loans, which help buyers in more rural areas. If you’re like most first-time homebuyers, however, you will probably seek financing in one of two ways: securing an FHA loan or choosing a conventional mortgage.

Whichever route you decide, you then have to choose loan terms, which are generally 15, 20, or 30 years, with 30-year mortgages being the most popular option.

Federal Housing Administration (FHA) loans

If you’re a first-time homebuyer who has a debt-to-income ratio of 50% or less and a credit score of at least 580, you may be able to afford a home by putting down just 3.5%; if you’re able to put down 10%, your credit score can be as low as 500. For cash-strapped borrowers and folks with suboptimal credit scores, FHA loans are much easier to secure and can provide a path toward homeownership.

But if you go this route, you’ll have to pay PMI. Plus, the FHA won’t let you borrow a large amount of money, which could cause you to miss out on pricey properties you really like. And in today’s hyper-competitive housing market, sellers may be less receptive to the idea of working with someone who’s financing the deal with 96.5% debt compared to someone who’s putting down 50% cash.

Conventional mortgages

If you find yourself on solid financial ground, a conventional mortgage may be a better option — particularly if you’re able to put 20% down and have a credit score that is higher than 740, which puts you in a position to get the best terms possible. This is something that simply can’t be overlooked in our era of rising interest rates.

Of course, meeting this high bar is a challenge, and you may still qualify for a conventional mortgage as long as your credit score is at least 620 and you can put down at least 10%.

What is the difference between a fixed and variable rate mortgage?

In addition to choosing the lender you’re going to work with, you’ll also need to choose what type of mortgage you want. For most buyers, this will mean choosing between a fixed rate or variable rate mortgage.

What is a fixed-rate mortgage?

A fixed-rate mortgage is a mortgage that has the same interest rate throughout the life of the loan. For example, if you lock in at 4% for 30 years, your interest rate will be the same until you ultimately pay off your mortgage three decades from now (or sooner!). Though interest is front-loaded on these loans and the amount you pay toward principal and interest varies month to month, total payment remains the same. Due to the predictable nature of these loans, many first-time homebuyers prefer them.

What is a variable-rate mortgage?

A variable-rate mortgage, also known as an adjustable-rate mortgage (ARM), is a mortgage with interest rates that are fixed for the first few years but change over time based on how specific benchmarks like the LIBOR index perform over time. In many cases, lenders entice borrowers by offering ARMs at lower rates than fixed mortgages for a specific period of time. Once that period ends, however, rates could move higher or lower depending on the market.

Popular examples of ARM mortgages include 2/28, where the borrower has a fixed rate for the first two years and then a floating rate for the remaining 28 years, and 5/1, where the borrower has a fixed rate for five years and a rate that resets every year thereafter.

As interest rates continue to rise, more and more borrowers are rolling the dice on ARMs. If you’re planning on living at a property for just a couple of years — and can stomach increased interest rates if your plans fall through — a 5/1 ARM could be a good option; maybe you’ll be out in three years. On the other hand, if you’re looking for a home you plan to live in for many years, you may want to go with a fixed mortgage instead.

How can I get the best mortgage rate possible?

To get the best mortgage rate, you need to be able to put down at least 20% on your home, have a low debt-to-income ratio, and have a strong record of employment or success as a small business owner. On top of that, you need to have a solid credit score. Typically, the most favorable mortgages are given to buyers who have a credit score of at least 740.

Credit scores explained

Your credit score is a fluid measure that represents your creditworthiness, i.e., how likely you are to repay your debts. This score is determined by five categories:1. Payment history (35% of your score), which represents how likely you are to repay debts on time.

2. Amount owed (30%), also known as credit card utilization rate, which reflects how much of your credit is currently in use; if you have a $20,000 credit line and have spent $2,000 against it, your utilization rate is 10%. Best practices suggest keeping your utilization rate as low as you can; below 10% but higher than 0% is ideal.

3. Credit history (15%), which measures the average age of all your credit accounts. The longer your credit history, the better (keep your oldest accounts open!).

4. Credit mix (10%), which represents the different types of credit accounts you have. Most first-time homebuyers might have a mix of credit cards, student loans, and auto loans, for example.

5. Credit inquiries (10%), which reflects how often you’ve opened a new credit line in recent years. When you open a new credit card, for example, the issuer conducts a hard inquiry on your credit, which stays there for two years. Mortgage lenders might raise an eyebrow if they see you’ve applied for several new credit accounts in a short period of time, which will adversely impact your credit score.

How to increase your credit score

No matter what it looks like right now, the good news is that you can take proactive steps to improve your credit score over time. Here are some tips to keep in mind that can help you bring your score to where it needs to be when you buy your first house.

Pay off credit cards on time and don’t carry a balance

Together, your payment history and credit card utilization rate make up nearly two-thirds of your credit score. By paying your debts on time and in full, you can improve your credit score steadily over time. Whatever you do, never make the minimum payment when you’re in the market for your first home. If you can’t afford to pay your credit card bills, it’s probably not the best time to buy a house.

Stop applying for new credit (except your mortgage!)

Since hard inquiries have an adverse impact on your credit score, don’t apply for new credit unless you absolutely have to.

Keep older credit cards open

Oftentimes, people close out old credit cards they never use for convenience. Resist the temptation. If you want to improve your credit score, your oldest credit cards are your friend. Keep them open, even if you just use them to buy a can of soda once a year.

What is the mortgage process like?

In today’s competitive housing market, homebuyers need to be ready to pounce on a property the moment they make up their minds. The easiest way to do that is by getting pre-approved for a mortgage instead of trying to secure financing at the last minute.

As you begin the pre-approval process, you first need to determine how much money you can afford to spend on your house and what type of mortgage makes the most sense for your unique circumstances. Once you’ve done that, get ready to collect a lot of documentation and send it over to your broker. This includes W2 forms, 1099s, profit and loss statements (if you own a small business), bank statements, investment account statements, what your cash outflows are, and how much debt you have, among other things. During this stage, the broker will also look at your credit reports to determine your creditworthiness. By securing a mortgage pre-approval, you demonstrate that you’re a serious buyer who’s ready to make a deal.

After you’ve been pre-approved and have had an offer accepted, it’s time to put down what’s called “earnest money,” which is typically 1% or 2% of the purchase price — a token that you are legitimately interested in buying the home. Once the earnest money has changed hands, your deal is pending, and it’s time to secure your actual mortgage — and also run a title search, conduct an inspection, and get the house appraised.

At this point, you should certainly talk with the lender that pre-approved you. But you should also check in with one or two other brokers to see if you can get a better deal.

If you buy a home for $500,000, put 20% down, and secure a 30-year fixed mortgage at 4%, you will pay $687,478 over the life of your loan (plus insurance and property tax). That same deal with a 3.75% interest rate lowers your total payment to $666,886 — a savings of more than $20,000 over the life of the loan.

In other words, when it comes to mortgage rates, every decimal counts.

After approaching a few lenders and passing over your information, you will receive loan estimates, which you can then compare to figure out which lender is giving you the best deal. During this process, you may be on the hook for credit report fees, which hover somewhere near $30 per lender. Unfortunately, loan estimates don’t last forever. If you don’t act quickly, your lender may have to adjust the terms as market conditions change. To avoid that, consider securing a rate lock, which gives you the peace of mind that comes with knowing your interest rate won’t change over a determined period of time — 30, 45, or 60 days, and even longer.

Once you’ve figured out which lender you want to work with, the underwriting process begins. Generally, underwriters will require borrowers to conduct an appraisal to ensure the home is worth enough to justify the size of the mortgage loan. (Of course, you’ll be responsible for the appraisal fee; that’s another $300 to $800, depending where you’re buying.)

Hopefully the odds are on your side, and the underwriters agree to approve your mortgage. Should that happen, your interest rate will be locked in from that point forward, and you’ll be that much closer to landing the home of your dreams.

Don’t forget about tax credits

As a first-time homebuyer, you may qualify for a tax credit when you close on a new home. In 2008, for example, first-time homebuyers who took the credit received a tax refund of up to $7,500. In 2021, members of Congress introduced the First-Time Homebuyer Act of 2021, which would revive a similar tax credit. At the time of this writing, that bill still hasn’t become law. This is all just to say that first-time homebuyers need to keep their eyes peeled for potential tax credits from both their state and federal governments.

Closing costs: The first-time homebuyer’s often-overlooked financial enemy

You’ve made an offer, it’s been accepted, and now you’re finally ready to close on the property. Get ready to be hit by a deluge of additional closing costs you might not even be aware exist, including:

• Loan application fees, which some lenders charge to handle your mortgage application.
• Attorney fees, which lawyers charge to create contracts and analyze transaction-related documentation.
• Closing fees, which are paid to the entity that facilitates the closing (e.g., a title company or an attorney).
• Courier fees, which can be levied if the deal is being done with paper documents.
• Escrow deposits, including prepaying property taxes, which are often required.
• Homeowners insurance, which generally needs to be paid up front for the first year.
• Mortgage broker fees, which can range from 0.5% to 2.75% of the home’s purchase price.
• Title insurance, which protects buyers in the event a previously undiscovered lien or ownership dispute arises.
• Origination fees, which cover the lender’s administrative costs and can hover near 1% of your mortgage.
• Real estate commissions, which can be as high as 6% of the final sale price; luckily, the seller is on the hook for these costs (though they often factor into the sale price).
• Recording fees, which hover near $125 and may be charged by a town clerk’s office to process the public land records.
• Title search fees, which range between $200 and $400 and cover the costs associated with ensuring no liens or disputes impact the property you’re buying.

Depending on your unique situation, you might get hit with even more fees than this (e.g., private mortgage insurance)! Very broadly, closing costs range between 2% and 5% of your mortgage. So, if you’re taking out a $500,000 loan, you might be on the hook for an additional $25,000 in closing costs.

This is all to say that, just when you think you’ve wrapped your head around how much your first house will cost, more fees will almost certainly come your way. Be ready.

Right now, I can’t get a mortgage. Am I out of luck?

When your mortgage application is rejected, it’s easy to feel dejected. But all hope isn’t lost. Maybe now just isn’t the right time for you, and that’s perfectly okay. In actuality, being unable to get a mortgage can be a blessing in disguise, particularly if interest rates plummet by the time you’re ultimately ready to afford your first home.

If you’re unable to get a mortgage, it could be because you have a poor credit score or haven’t saved up enough for a down payment. If that’s the case, it might be time to start working on stockpiling money away and improving your credit score (or hiring a company to help you do the same; but that’ll hurt your saving-up-for-a-down-payment plan). While you’re at it, you may want to look into debt consolidation services that can help you refinance your debt and pay it off faster.

Additionally, you also might want to take a look at rent-to-own programs, which give you a path to home ownership even if you can’t get a mortgage right now. Under these initiatives, you can rent a property as a tenant and have the option to buy it when your lease ends. This can be a great way to determine if you actually like living somewhere before making one of the biggest decisions of your life. For those with less-than-optimal credit, this is also a great way to help get your credit back on track while pursuing homeownership at the same time.

Real estate agents: Pros and cons

According to the National Association of Realtors®, 87% of recent homebuyers enlisted the services of a real estate agent or broker during their latest transaction. But not every first-time homebuyer needs to hire an agent. With that in mind, let’s examine some of the top advantages of working with a realtor — and some of the reasons you might prefer to go it on your own.

Advantages of working with a realtor

Faster process

By now, you should have an idea of how complicated the home-buying process is. When you work with an agent, you get to leverage the experience of someone who lives and breathes the process day in and day out. Not only does this help you make a better purchasing decision, it also saves a considerable amount of time.

Market knowledge

In today’s booming real estate market, how can you tell that a property is priced properly? The right real estate agent will know the local market inside and out and can help you identify reasonably priced properties and those that are way above-market. This information can help you avoid making a deal you ultimately regret.

Negotiation skills

Are you ready to negotiate with another real estate agent? Because if you don’t hire an agent of your own, that’s what you’re going to need to do. By joining forces with the right agent, they will negotiate the deal on your behalf. This can help you get a better price or get the seller to include more items in the deal — like that nifty wine fridge or the area rug that really ties the room together.

Networking

Hire an agent, and chances are they will know the agent on the other side of the deal. These personal connections can help deals close smoother. Plus, agents can recommend all sorts of folks you might need to hire during the process — like home inspectors, well inspectors, septic tank companies, real estate attorneys, and more.

Disadvantages of working with a realtor

Commission

One of the biggest downsides of hiring a realtor is paying their commission. Generally speaking, realtors get between 5% and 6% of the deal as a commission, which is split evenly between the buying and selling agent (or pocketed by one agent if they’re working both sides of the deal).

If you go through the process on your own, half of that commission is wiped off the books — or all of it, if you’re buying a for-sale-by-owner (FSBO) property. So, choosing not to hire an agent could help you save a good chunk of money.

Intermediary

When you work with an agent, they communicate on your behalf to the agent representing the seller (or the sellers themselves, in a FSBO scenario). As a result, you’re incapable of directly communicating with the people on the other side of the deal. This could slow the process down considerably. It can also cause a lot of stress as you anxiously wait for an update.

Multiple clients

Unfortunately, when you hire a realtor, you’re not their only client. As such, you might have to get used to waiting. In some circumstances, you might even miss out on a deal because your agent is focused on helping someone else. Who knows? Your agent might even represent a different client in a deal you were interested in. That’s just the way it is.

Misalignment

Not every real estate agent is the same. Unfortunately, some homebuyers learn this lesson the hard way. According to the National Association of Realtors, 73% of buyers only interview one agent before hiring them. If you end up with the wrong agent, they may end up leading you down a path where you end up with a bad deal (e.g., because they care more about their commission than helping you find your dream home).

You can avoid this issue by interviewing a couple agents before deciding who to go with. Keep in mind that, once you sign an exclusivity contract with a realtor, you are bound to only use that agent until you formally cancel the contract. If you enlist another agent before doing so, you may end up in legal jeopardy. Keep in mind you can (and should) try to negotiate down the length of these contracts just in case you aren’t happy with your agent’s representation.

Are you interested in getting free advice from expert real estate agents while earning rewards as you explore buying your first property? HomeApproach has you covered.

What to think about when buying your first home

When you’re buying your first home, you’re obviously going to be interested in the house itself, the property, and what other amenities might exist in the deal (e.g., an in-ground swimming pool or an outdoor sauna). Beyond that, here are some other considerations to keep in mind:

• Neighborhood. You’re buying more than just a house and the property itself. You’re also buying the neighborhood. Is your ideal home within walking distance of restaurants and bars? Or would you prefer to live near open space so you can hike and enjoy the outdoors? Spend some time studying the neighborhood and make sure it’s somewhere you can imagine living. Also, as a general rule, avoid buying the most expensive house in the neighborhood; it could hurt you down the road.
• Schools. If you have kids or are planning to, you’ll definitely want to do some research on the local school district to make sure you’re happy with the caliber of education. Even if you don’t have kids, education is highly correlated with property values. According to the National Bureau of Economic Research, property values increase $20 per every $1 spent on education. That being the case, you might want to buy your first home in a community that invests in education.
• Property taxes. Before you sign any contract, you need to wrap your mind around local property taxes and get a sense of how your potential new town’s taxes have changed over time. In addition to taxes on your home, you may also be on the hook for taxes on motor vehicles and boats you own.
• Location. Are you happy living out in the sticks or would you prefer living closer to public transportation? Does the local pizza place deliver to the address you’re considering? Is your property close enough to the highway? Only you know the answer to these questions.
• Town politics. If you’re moving to a new area, spend some time researching the town’s politics and finances. The last thing you want is to move to an area undergoing local scandals or involved in high-ticketed lawsuits that may impact your property taxes moving forward.
• Starter home. You’re buying your first home. Do you plan on living there for as long as possible? Or might you want to flip your house in a couple years and move into your forever home from there? If you’re buying a starter home, don’t sweat it: You can defer capital gains when you buy your next home by using a 1031 exchange.

My offer was accepted! That means the process is done, right?

Not at all. Once your initial offer is accepted, the fun is just beginning

At this point in the process, you hire a home inspector who will thoroughly examine the property to determine the condition of the nuts and bolts, including the HVAC system, furnace, structural components, electrical systems, plumbing, roof, and chimney, among other things. Inspections cost anywhere between $300 and $1,000 on average, depending where the property is located (hey, look, another hidden cost!).

Once you’ve got the home inspector’s report, it’s time to go back to the seller and ask for additional concessions — or keep the deal as-is, if you don’t mind what the report surfaces.

Keep in mind that the inspector may find something that is a dealbreaker (e.g., the house requires a brand-new foundation and septic tank). Should this happen, you still need to pay the inspector — and, if you continue house hunting, you’ll need to pay the next inspector, too.

Real estate negotiation tips for homebuyers

In most cases, you’re probably best off letting a real estate agent negotiate on your behalf. But if you decide to go it alone, here are a few tips to keep in mind:

• We’re currently in a seller’s market, so be ready to spend top dollar to close a deal.
• Even so, you may be able to get a better deal by getting a little creative. For example, using an odd number can make your offer stand out (e.g., $450,000 vs. $451,199), forcing the would-be seller to spend more time thinking about your proposal.
• Remember, there are two rounds of negotiating: before the initial offer is accepted and after the inspection happens. Once you get a seller to accept the original offer, they’ll become emotionally invested in the deal. If a lot of items come up during the inspection, you may be able to get some significant concessions.
• Real estate negotiation isn’t just about dollars and cents. You can also ask the seller to add physical items to the deal — like gym equipment, a hot tub, or furniture.

Additional hidden homeowner costs to consider

Suffice it to say that being a homeowner is not an inexpensive endeavor. Here are some other hidden costs to consider:

• Additional taxes. Your new town or city might levy taxes besides property taxes, like fire district taxes. Make sure you understand the totality of your potential transaction’s tax implications.
• Homeowners insurance. You’ll need to carry homeowners insurance as long as you have a mortgage. On average, a policy with $250,000 in coverage will set you back $1,383 each year.
• Utility bills. If you’re moving into a larger space, think about how your utility costs might change. As a best practice, make sure to ask the seller for the previous year’s worth of utility bills (e.g., heating oil, electricity, and water). That way, you can wrap your mind around your future costs.
• Inevitable repairs. Ask any homeowner and they’ll tell you the same thing: It’s only a matter of time before something major goes wrong at your home. Maybe the AC, furnace, or water treatment system fails, for example. As a new homeowner, you’ll have to cover these costs out of pocket; there’s no landlord to help. To protect against this, you might want to consider a home warranty that will help offset costs and cover gaps in homeowners insurance.
• Moving costs. Unless you’re planning on hauling all of your belongings from your old place to your new one in your sedan, you’re either going to need to rent a U-Haul or hire professional movers to get you settled in. According to one recent report, movers cost anywhere between $800 and $5,700 depending on how long your move is. Add it to the tab!
• Time off of work. This might be the most hidden cost of them all. You can’t work when you’re moving. If you’re an employee, that means you’ll need to take vacation days off during the move. If you’re self-employed or a 1099 contractor, you’ll likely have to take several days and miss out on generating income.

Unforeseen challenges for first-time homebuyers

Since it’s your first time through the homebuying process, it’s easy to be blindsided by situations you would never expect to encounter. But over the years, first-time homebuyers across the country have seen it all. Here are some of the unforeseen challenges you might encounter along the way.

Falling in love with a property too soon

First-time homebuyers have a tendency to fall in love with a home way too early. You might see a house you think is awesome, decide to make an offer right then and there, and start thinking about your new life and how you’re going to set up your new space. All of a sudden, your agent calls you to tell you the seller accepted another offer. Just like that, your dream evaporates. Avoid dealing with this emotional rollercoaster by only truly falling in love with a property once you’re living in it.

The seller backs out unexpectedly

Your offer has been accepted, you’ve passed the inspection, and your closing date is getting closer and closer. Then the seller has a change of heart and decides to pull out of the deal, and you’re back to square one. A scenario like this isn’t out of the realm of possibility, so be prepared for it.

Something comes up during the home inspection

One of the most common ways deals fall apart occurs when the home inspection reveals some major problems. You might fall in love with a house only to learn it has a rotten roof, mold in the basement, and a structurally unsound chimney. In some instances, you may be able to work through these serious issues with the seller. In many cases, however, major issues are a dealbreaker because sellers don’t want to budge.

Something comes up after the home inspection

Just because you’ve made it past the inspection doesn’t mean your deal is done. For example, your lawyer may uncover serious issues when doing their due diligence — like a seller who’s trying to hide the fact the property used to have an underground oil tank that leaked and caused environmental damage that needs to be mitigated. Upon learning this information, the attorney would likely recommend you pull out of the deal. How could you not take their advice?

Something crazy happens outside your control

If we’ve learned anything over the last two years, it’s that the world can change drastically overnight. A completely unpredictable event — like the pandemic — can always throw a wrench into your plans. If dividend income represents the lion’s share of your salary, a lender might decide to deny your mortgage application when the market takes a significant turn for the worse. Just remember anything can happen at any time, and there might not be anything you can do about it.

First-time homebuyer mistakes to avoid

Since they’ve never navigated the process before, it comes as no surprise that first-time homebuyers make mistakes. Learn about these common mistakes so you don’t suffer the same fate.

Finding a house before securing a mortgage

Without a mortgage pre-approval letter, it’s impossible to act as fast as possible on a deal. In today’s incredibly competitive real estate market, failing to secure financing before shopping for homes probably means you won’t be first to act — which could cause you to miss out on your dream property.

Not shopping mortgage brokers

Since it’s convenient, many first-time homebuyers choose to do business with the first broker they talk to. But by shopping brokers, you may be able to get a better rate. Over the life of a 30-year loan, a fraction of a percent can really make a huge difference. Be sure to engage at least a couple of brokers before signing a contract with a lender.

Not doing an inspection

There’s a tendency among first-time homebuyers to willingly bypass a home inspection. They’ve fallen in love with the property and think it looks in good enough shape to their untrained eye. A few months after the deal is done, they learn the hard way why inspections are necessary when they need to replace their central air system. While inspections can be pricey, they are always necessary. Skip an inspection at your own risk.

Spending more than you should

Saving up for a down payment and closing costs is one thing. Being able to live comfortably on the other side of your first real estate transaction is quite another. Be smart about your finances, and don’t take on a bigger property than you can truly afford. Always be sure to calculate what your monthly mortgage payment would be to determine your affordability. Here is a free online mortgage calculator you can use to help easily figure it out.

Furthermore, be sure to research what assistance programs might be available to you. First time home buyers can often apply for down payment assistance on the local level through state or city programs. Usually the U.S. Department of Housing and Urban Development (HUD) website is a good place to start (link below in resource section). Grants or no-interest loans are two examples of offerings which may be available to help with down payments and closing costs.

Making decisions based on emotion

It’s all but impossible to go through a real estate transaction without emotion. Unfortunately, many first-time homebuyers let emotion guide their decision-making. This is one area where working with a trusted real estate agent can make a big difference. The right agent can walk you through the process and speak to you through an experienced, knowledgeable, and objective lens.

Additional resources for first-time homebuyers

Since you’ve made it this far, you’re no doubt interested in learning as much as you can about buying your first home. Here are some additional resources you may want to check out:USA.gov | Help Buying a New HomeChase.com | The 28% (Monthly Income) Rule
Bankrate | 5 First-time Homebuyer Loans and Programs
Nerdwallet | First-Time Home Buyer Programs by State
Freddie Mac | Three Pro Tips for First-Time Homebuyers
U.S. Department of Housing and Urban Development (HUD) Housing Assistance

Get advice from a real estate expert today!

At Home Approach, we’re all about helping people like you find free advice from experts on how to navigate the first-time home buying process. While this might be your first time through the process, our experts have helped countless people like you end up in the home of their dreams.

Ready to accelerate your journey to homeownership? Sign up for Home Approach today

Disclaimer:

The content provided on this website is offered for educational purposes only. While we endeavor to provide accurate and up-to-date information, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability of the content for any purpose. Visitors are advised to consult with qualified experts before making any financial decisions or taking any actions based on the information provided on this website.

In recent years, credit repair companies have gained considerable popularity. Many Americans are struggling with bad credit but aren’t sure how to repair their negative credit history.

As a result, they might look to a credit repair service like Lexington Law. This experienced firm is one of the biggest names in the credit repair industry, which means you’ve probably heard of it.

In your search for the best credit repair program, this review hopes to shed some light on one of the most reputable firms out there. We’ll also provide valuable background information on Lexington Law, how customers perceive the company, and an overview of how their credit repair process works.

Lexington Law review: Brief history and overview

The Lexington Law Firm began serving customers in 2004. Based in North Salt Lake, Utah, Lexington Law has another office in Tucson, Arizona. Today, it serves customers in 48 states (not including Oregon and North Carolina) and the District of Columbia.

In addition to credit repair services, Lexington Law also provides personal finance tools and identity protection services.

How does Lexington Law work?

As a credit repair firm, Lexington Law’s lawyers will work with credit bureaus on your behalf to challenge negative items on your credit report, which might include:

• Collections
• Late payments on credit card bills
• Bankruptcies
• Repossessions
• Dispute letters
• Charge-offs
• Foreclosures
• Judgments

Due to the Fair Credit Reporting Act, credit bureaus — like Equifax, Experian, and TransUnion — must include only accurate and verifiable information on consumer credit reports. If any items on your credit report fail to meet these criteria or stem from a scam, the bureaus must remove them.

Once the bureaus remove any inaccurate or misleading entries on your report, you should see your credit score improve.

Pros and cons of Lexington Law’s credit repair services

Pros

● Easy-to-use smartphone app: A customer-friendly, well-made app that gets outstanding ratings from customers.

● Free consultation: Offers a free consultation to new clients, which is valuable to users who want to better understand their financial and credit history.

● Transparent fees with no upfront charges: Lexington Law doesn’t charge customers an upfront fee unlike most companies in this field.

● Personalized services: Lexington Law assigns a paralegal to each case, allowing you to work with the same person throughout the entire credit repair process.

● Credit monitoring available: Lexington Law offers two plans that offer credit monitoring services.

Cons

● Relatively expensive: The cheapest plan is $89.95, which can be costly for some consumers.

● No money-back guarantee: Many credit repair companies offer clients a refund if results aren’t up to par (i.e. no removal of negative items). However, Lexington Law doesn’t.

● Not BBB accredited: Lexington Law has a relatively low Better Business Bureau (BBB) rating of C.

● Unavailable in two states: Lexington Law doesn’t offer credit repair services in Oregon and North Carolina.

● Alleged legal violations: In 2019, The Consumer Financial Protection Bureau (CFPB) accused Lexington Law of violating federal laws.

Lexington Law services

Lexington Law offers three packages at different price points and service offerings.

1. Concord Standard

This is the basic plan, which covers the essentials of credit repair. This includes credit repair and credit interventions. Their credit dispute process involves identifying errors on your credit report and requesting the credit bureaus to remove those items.

Under the Concord Standard Plan, Lexington Law will also help you overcome bureau challenges by sending out credit intervention letters on your behalf to lenders and collection agencies. These include goodwill letters and debt validation letters.

The monthly fee for Concord Standard is $89.95.

2. Concord Premier

The Concord Premier plan is useful for customers who need additional help with credit repair. This plan includes monthly analyses and ongoing credit monitoring. Aside from the basic credit repair services, Concord Premier will also include:

● ReportWatch

● Credit Score Analysis

● InquiryAssist

● TransUnion Alerts

The monthly fee for this plan is $109.95.

3. Premier Plus

In addition to basic credit repair services, monitoring, hard inquiry removal, and alerts, Premier Plus provides financial planning services. These include:

● FICO Score Tracker

● Identity Theft Protection Services

● Cease-and-Desist Letters

● Personal Finance Tools

Premier Plus will cost you $129.95 a month.

Is Lexington Law the best credit repair company?

With many years of experience helping consumers repair their credit, Lexington Law has established itself as one of the premier credit repair companies in the country. When you work with the firm, they will help you achieve good credit by conducting a credit repair review and facilitating creditor interventions on your behalf — providing a level of service you simply can’t deliver on your own in a time frame you can’t beat.

For more information on the easiest way to end up with better credit — including contact information, how to get a free credit report, and what a credit consultation is like — visit the Lexington Law website at lexingtonlaw.com.

Disclaimer:

The content provided on this website is offered for educational purposes only. While we endeavor to provide accurate and up-to-date information, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability of the content for any purpose. Visitors are advised to consult with qualified experts before making any financial decisions or taking any actions based on the information provided on this website.

A home is perhaps one of the largest investments you’ll ever make, which is why you need to keep important considerations for buying a house top of mind during the house-hunting process.

As a first-time home buyer, whether you’re excited or intimidated about the process, there are several factors you want to consider. After all, no one wants their biggest financial move to be a complete failure.

In your journey towards homeownership, take a look at these 10 things to consider when buying a house — whether its an older home, a starter home, or your forever home.

What to know before buying a house

1. Other people’s opinions and experiences

As you plan to buy your home, you’ll likely hear some thoughts and opinions from several different sources. Whether it’s your family members, friends, or colleagues, you’ll probably hear their “two cents” when it comes to homebuying decisions.

Even though it’s probably not feasible to listen to every single piece of advice, it can be a good idea to hear out the ones who have experience in the homebuying process — particularly a trustworthy realtor.

So, when it comes to deciding whose advice to listen to, turn to people who have worked in real estate before or those who have bought two or more homes. They’re likely to have extensive knowledge about all the important details of the homebuying process.

2. The size of your ideal home

When it comes to choosing the right home for you, find one with the exact space and floor plan you need. In other words, don’t buy a home with a ton of square footage when it’s not necessary. More space means more area to clean and maintain as well as higher utility bills.

To figure out how large your next home should be, look at your current space before you begin the house-hunting process.

For example, are you able to live comfortably with the current number of bedrooms you have? Or do you need more due to certain changes (e.g., a new baby or a work-from-home job)? How large is your kitchen? What about your closets? Do you have functional storage space?

Ask yourself these questions as you’re looking at new homes and attending open houses. Doing so can help you decide on a home with just the right amount of space for your unique needs ready for you when you move in.

3. Your loan approval terms

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Getting pre-approval from a mortgage lender doesn’t mean certain terms are set in stone. However, the terms of the loan can give you an idea about your potential mortgage payment, interest rate, principal, property taxes, and homeowners insurance costs. This will help you come up with a detailed budget for what your monthly payments will look like.

Not only that, but your loan approval numbers can also help you determine how much you possibly need for a down payment. If your down payment is 20% of the total purchase price of your home, you can avoid private mortgage insurance — something that can be particularly helpful in an era of high mortgage rates.

If you can’t find a home that’s within your loan pre-approval limit, or if you can’t afford to put down 20%, then it means you should keep looking because your price range is too high. Don’t forget, you’ll have to pay for closing costs, too, which can be prohibitively expensive.

This is why it’s so important to get pre-approved first before looking at a house. Pre-approval defines your search and helps you determine which properties are a good fit for you to look at. After all, no one wants to fall in love with their dream home only to find out it’s entirely out of their budget because they don’t qualify for a big enough home loan.

If you want to get the best deal possible, you need to have an excellent credit score. If yours isn’t where you’d like it to be, you may want to enlist the services of a credit repair agency.

4. What a home inspection includes

Another homebuying nightmare is purchasing a home that has major issues. This is why inspections are so vital during your home search. Home inspections can uncover a wide range of major problems, including:

● Pest infestations

● Roof damage

● Mold

● Rot

● Water damage

● Lead piping or paint

● Water damage

● Water heater damage

● HVAC issues

● Asbestos

● Improper insulation

● Foundation problems

● …and more

It’s important for homebuyers to be aware of these problems and understand what renovations and upgrades may be necessary before closing on a home.

In some cases, certain issues a home inspector finds might result in a completely different offer that requires the seller to pay for repair costs before closing.

5. The home’s neighborhood

If you’ve decided on a particular neighborhood for your dream home, consider taking a walk through there. Look at your surroundings to get a feel for the homes.

What are the home values in the area? What condition are the houses in? Are the yards well-kept? How’s the landscaping? What about the crime ratings and the school district?

If you don’t like what you’re seeing, or it just doesn’t feel right, chances are it’s a deal-breaker and buying a home in that neighborhood isn’t the best move.

6. The age of appliances

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Another important consideration for buying a home is the age of appliances and systems. From washers and dryers to refrigerators and stoves, the age of your appliances can play a huge part in their overall health, functionality, and lifespan.

So, as you look for your first home, get a bit more information about the age of major appliances. An appliance that’s been in operation for over 10 years could signal a replacement is right around the corner.

Not taking into account the age of a home’s appliances could set you up for heartbreaking, budget-busting replacement costs later on down the line.

7. The home’s location

A home with a long commute to work or school can cause an inconvenience. The same could be true of a house that’s not close to public transportation.

So, if commute is important to you, make sure you consider a home’s proximity to essential places. Look up directions or make the drive yourself to get a sense of traffic and potential routes.

8. The orientation of windows

An often-overlooked factor in buying a home is which way the windows face. The direction your home faces affects the amount of sunlight it gets as well as energy efficiency, heating and cooling costs, home maintenance, energy flow, and more.

While the orientation of windows might not be the most important issue, having them in optimal locations is definitely a nice-to-have.

9. Homeowners Association details

Before you buy a property, you need to determine whether the home you’re interested in is part of a homeowners association (HOA).

If it is, you first need to read through those requirements. Determine how much expenses are and what they cover to see whether it makes sense to you. Look at other rules of the HOA that might affect certain actions — like parking, landscaping requirements, or holiday decorations.

10. Whether there are current offers on the house

So, what are other things to do before buying a house — particularly in a competitive market?

One key action is to check if there are any existing offers. Your real estate agent should be able to help you. If your agent discovers other bids, it could mean you’ll have to make counteroffers. This could be especially true for popular homes on the market.

Enjoy the homebuying process!

Before submitting your offer on a home, make sure you’ve considered what’s included in this checklist.

And remember, take the time you need to find the right home for you and your family. Don’t rush the process.

Instead, have fun through every part of the journey. Looking back, you’ll be glad you did!

Disclaimer:

The content provided on this website is offered for educational purposes only. While we endeavor to provide accurate and up-to-date information, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability of the content for any purpose. Visitors are advised to consult with qualified experts before making any financial decisions or taking any actions based on the information provided on this website.

The expansion in remote and online working opportunities has made it easier than ever to earn extra cash. Imagine what you would do with a few more hundreds or thousands of dollars every month!

Wouldn’t it be nice to have a side hustle that helps you pay your bills, boost your savings, and cover unexpected expenses?

Keep reading to learn about the top 15 ways to earn extra cash in your spare time without risking your full-time job — making it that much easier to save up for a down payment.

1. Become an online blogger

Do you enjoy writing? Do you have a firm grasp of the English language? If so, you should consider trying your hand at being a blogger — a skill that is in high demand today.

While you can always opt to launch your own blog, you may find it easier to make money writing part-time for other companies. For example, you can go to sites like Fiverr, Upwork, and Craigslist to find opportunities. Do a good job, and you can turn your side hustle into a small business with word-of-mouth referrals.

Word to the wise: Writing for the web is different than writing a college essay. If you need some help, consider taking an online course to learn the ins and outs of blogging.

2. Earn money through online surveys

Your opinion is valuable!

Numerous companies are willing to pay a significant amount of money to learn more about their target audience’s preferences and motivations. If you’re the type of person who loves sharing their opinion, this is one of the best part-time jobs there is.

Individual surveys may take between 10 to 30 minutes, and you can do as many as you wish in one sitting. If you sign up with different companies and complete your allotted tasks diligently, you can earn up to $10 per hour working on your own schedule.

Some of the legitimate survey sites include Branded Surveys, Survey Junkie, Swagbucks, and Opinion Outpost. What’s interesting about this line of work is that you can fill out surveys when you have downtime at other jobs — whether you’re babysitting, petsitting, teaching English, searching for your next gig on Taskrabbit, or waiting to pick someone up for Lyft.

3. Get paid to watch viral videos

Watching viral videos is a great way to make extra money while getting worthwhile entertainment. It might not get you rich but this is among the lowest-effort side gigs you can try. Based on your commitment, the estimated monthly income is $225. But you might be able to earn even more.

If this sounds like a scam, it isn’t. If you’re interested in giving it a try, Inbox Dollars is one of the best companies to work with. It only takes a few minutes to create an account and start earning.

4. Earn through shopping and making deliveries

Did you know you can make money online by shopping for products and delivering them to their respective clients?

If you love shopping and helping others, Instacart might be an excellent place to start. This is a site where you shop for groceries in-person and deliver them.

The best part is that you can work for Instacart in your free time. Instacart pays you within one hour of delivery with an instant cash-out option. Not bad!

5. Get paid to deliver with Uber Eats

If you have a bike, car, or scooter, you can use it to make money right now!

Uber Eats gives you a chance to deliver food to different clients and get paid. All you need is to download their app and upload your documents.

Once approved, you will receive a notification that allows you to start working. When you drive for Uber, there isn’t any supervision, which means you’ll be your boss and you’ll get to keep all your tips.

6. Virtual tutoring

If you have subject matter expertise, you can make a side hassle. Virtual tutoring involves a one-on-one online interaction, and you can have as many students as your schedule allows.

The best places to find online tutoring jobs include VIPKid, Education First, and Chegg. Payments can be hourly or per session. Believe it or not, it’s possible to earn up to $1,000 per month with some commitment.

Not interested in working with kids? You might find success as a virtual assistant, essentially helping executives manage their days.

7. Storage space leasing

Do you have an attic, basement, shed, or underutilized garage? If you’re looking to monetize it, Neighbor.com should be your next destination.

This peer-to-peer (P2P) platform connects people in need of extra space with those that have it. Neighbor.com charges 50% of the total rate per storage unit, which is kind of pricey. Although you will earn less, it’s a great way to generate passive income by doing little or nothing at all.

8. Freelance writing

Multiple high school and college students, employees, and retirees earn extra money through freelance writing.

If you’re interested in being a freelance writer, you might want to check out sites like Textbroker, Upwork, and Steady Content. If your sights are set higher, you may want to check out sites like LinkedIn and look for work there, too.

Not the best writer in the world but still looking for a flexible work-at-home job? If you have the skills, search for graphic design freelance work instead.

9. Freelance editing and proofreading

Freelance editing and proofreading involve selling your grammatical skills. In this role, you only need to go through some written copy and ensure it’s polished before submitting them for publishing.

While you’re at it, you may want to try your hand at transcription. Truth be told, you can make good money being a freelance transcriptionist if you can transcribe things like doctor notes and meeting notes.

10. Shop online and get free gift cards

Recent studies show that around 92% of shoppers buy things from online stores.

However, not many people know that they can earn cash back rewards simply by shopping. For example, Mypoints allow you to earn points for every dollar spent online. You can redeem them for gift cards from more than 75 retailers, including Walmart, Amazon, Etsy, and eBay.  

11. Sell your unused diabetic strips

There are millions of Americans with diabetes today. Cash For Diabetics is a newly launched company willing to pay up to $30 for unused diabetic strips.

If you or someone you know is suffering from the disease, you can stop throwing out unused kits and resell them instead. It’s an easy way to make a couple of bucks while preventing waste.

12. Borrow up to $50,000 and invest in your goals

Taking personal loans could help you fund some important projects in your life upfront — like ditching your boring data entry job and starting your dream dog walking business instead, one that rivals Rover.

If you’re looking for a loan, visit AmOne, which is a legit marketplace for finding loan providers. The operator only requires you to provide a few details of the loans you need, and it intelligently connects you with the perfect lenders.

13. Earn $10 for investing in companies like Amazon, Tesla, and Apple

Regardless of what you might think, you don’t need a lot of money to start investing in companies like Apple, Tesla, Google, and Amazon thanks to Stash, which helps you buy fractional shares for as low as $5.

What’s more, Stash gives you $10 to invest when you make your first deposit of $5 into your portfolio. Head over to the company’s website to get started.

14. Become a user experience tester

All online companies need their websites and applications to run seamlessly. When something is wrong, they call user experience (UX) testers to get their feedback.

If you are web savvy and can easily identify dark patterns and areas where the user journey breaks, you can make money testing software. Reputable companies like TryMyUI and UserTesting will pay you via services like PayPal just for giving feedback.

15. Become an influencer

If you have a large social media following on Instagram, Twitter, or Facebook, you might consider becoming an influencer. Just reach out to your favorite brands and let them know that you wish to work for them. For sponsored content or affiliate marketing, you can check out Amazon Associates and ShareASale.

Don’t have that many followers? Don’t worry. You can always try your hand at being a social media manager in your spare time.

Which side hustle will you choose?

Since you’ve made it this far, you know how you can utilize your free time to earn extra cash. But keep in mind that the above list is by no means comprehensive. From dropshipping, starting a podcast, or being a bookkeeper to designing T-shirts, selling things on sites like Poshmark and Facebook Marketplace, or even renting space out on Airbnb, there’s no shortage of ways to make money.

Ultimately, there isn’t a template you can follow to achieve financial freedom. Everyone is different, and everyone has different skills and interests.

Start thinking outside the box and figure out ways to earn more money on the side. Take our word for it: You’ll be happy you did.

Disclaimer:

The content provided on this website is offered for educational purposes only. While we endeavor to provide accurate and up-to-date information, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability of the content for any purpose. Visitors are advised to consult with qualified experts before making any financial decisions or taking any actions based on the information provided on this website.

Buying your first home is likely one of the most exciting times of your life. But the process can be stressful and even discouraging when you have no one to guide you through your home buying journey.

In this first-time homebuyer’s guide, we’ll walk you through the basic steps of buying a home.

1. Improve your credit to secure a loan

If you’re trying to navigate how to buy your first home, your very first step should be to check your credit score before working with a lender. For most loan types, your credit score needs to be 620 or higher to buy a house. Of course, there are exceptions to this, like FHA loans from the Federal Housing Administration, an agency under the U.S. Department of Housing and Urban Development (HUD).

If your credit score is lower than 620, however, you should probably work on improving it. To do that, you can:

● Pay off any credit card debt

● Keep credit utilization to 30% or lower

● Dispute any errors you see on your credit report

● Work with a credit counseling agency to improve your credit

Once you’ve raised your credit score enough to qualify for a loan, check with multiple banks to see their interest rates, the length of the mortgage, and how large of a loan you qualify for. Thanks to the internet, you can secure mortgage preapproval and compare mortgage rates online. Some mortgage lenders even have an online calculator to help you calculate:

● Total mortgage amount

● Monthly mortgage payment

● The highest mortgage amount you qualify for

● The highest monthly payment you qualify for

In order to increase the chances a transaction ultimately goes through, it’s important to get that mortgage prequalification letter, which indicates that you’re a serious buyer.

2. Set a budget

Based on your loan pre-approval terms and your income, determine how much house you can afford and what home price makes sense for your financial situation. Most lenders agree that your mortgage payment shouldn’t be more than 28% of your gross monthly income.

As we stated above, you can use a mortgage calculator to help you get a sense of your potential expenses and the home loan amount you can afford. Use one that accounts for other costs such as private mortgage insurance (PMI), property taxes, principal, homeowners insurance, and interest.

Don’t forget that there are all sorts of hidden costs in the homebuying process, which many borrowers overlook. For example, you’ll have to pay for a home inspection, and you’ll have to cover closing costs, too, which include things like title insurance, mortgage loan origination fees, home appraisal costs, and realtor fees, which the seller pays. You may also have to put additional funds into escrow at this point to cover taxes and insurance expenses.

3. Calculate your down payment

The amount of your down payment will depend on the type of loan you apply for and the total purchase price of your home.

For example, conventional loans usually require a down payment of 20% to avoid mortgage insurance. Other lenders, like VA loans and FHA loans, might require a lower amount. As an example, consider a home for $250,000. A down payment of 3.5% is $8,750. If you want to avoid mortgage insurance, however, you’ll have to fork over $50,000, or 20%.

Remember that the more you put down upfront, the less your monthly payments and interest will be (assuming you have a fixed-rate mortgage).

4. Choose an ideal neighborhood

In addition to the price range and affordability, the location of your real estate new home is a vital factor in homeownership. When it comes to location, you’ll want to consider a variety of factors, including:

● Crime rates

● Schools

● Public amenities (e.g., nearby stores, shops, restaurants, offices, and public transit)

● The potential for natural disasters

● The value of the homes in the area (e.g., a house in New York City costs more than a house in upstate New York)

5. Identify your dream home’s general style

There are so many home styles to choose from, including colonials and midcentury modern homes. The type of style you choose will depend on your preferences and the size of your family. Choosing a general style can help you narrow down your search for the perfect home.

Keep in mind that certain single-family home styles tend to be more valuable than others, depending on the housing market.

6. Consider important home features

What are certain home features you just can’t live without? What key features will make you excited to come home every day? Keep the following features in mind to help with your house-hunting decision:

● The size of the lot

● The number of bedrooms

● The number of bathrooms

● The kitchen layout

● The age, style, and condition of appliances

● The size of the yard

● Smart home features

● Energy efficiency

● Detailed finishes

● Lighting

● Accessibility (e.g., wide doorways, ramps, walk-in tubs, and showers)

7. Figure out the ideal house size and layout

When it comes to buying a first house that’s the right size for your family, consider your wants and your needs. For example, you might want a larger home. But do you really need the extra space?

An ideal house size would have enough rooms per person to sleep individually. This should also include one room for guests and an office. For example, for two adults and one baby, four bedrooms should be suitable.

Anything larger could be difficult to clean and maintain, and could result in higher utility expenses.

8. Research the schools in your chosen area

If you have children or plan on having them, it’s important to think about the quality of schools in the area. To do this, check sites like Zillow for school rankings.

As you’re researching schools, you’ll likely come across both public and private options. If public schools aren’t great in the area, then you might consider private schools for your kids if you can afford it. Researching the quality of schools can help you determine whether the area is right for your family.

9. Factor in your commute

When it comes to buying your first home, the commute time matters. If you don’t want to spend countless hours stuck in traffic on your way to work, then you want a shorter commute.

However, if you find a perfect home that has all the features you want, you might be tempted to overlook a longer commute. But this isn’t a great idea, because you could end up regretting your decision down the road. Plus, a longer commute means higher travel costs, especially gas and car maintenance.

If you ultimately decide to buy a home that extends your commute, consider public transportation. This can help you save on vehicle expenses.

10. Find a real estate agent

Once you’ve settled on the important details that will determine the location and type of home you’re looking for, find a reputable real estate agent. A good real estate agent will take care of all the hard work involved in buying a home by:

• Guiding you through the homebuying process
• Handling price negotiations
• Researching homes for you
• Answering all your homebuying questions
• Showing you homes best suited to your needs
• Sharing information about any first-time homebuyer programs, loan programs and down payment assistance programs
• Telling you about what type of mortgage might be best for your situation
• …and more!

Buying a home for the first time can be scary at first. But when you understand the process and know which steps to take, the home purchase experience can go a lot more smoothly.

As you begin going to open houses and researching properties online, it’s important to know your eligibility for certain loans and assistance programs. Or, if your personal finance situation is rock solid, you may be best off securing a mortgage preapproval letter and begin working your way to the best mortgage you can secure — and, ideally, a smooth closing process.

Now that you’ve read this homebuyer guide, it’s time to continue your learning. If you have any questions during the process, get free advice from a real estate expert.

Disclaimer:

The content provided on this website is offered for educational purposes only. While we endeavor to provide accurate and up-to-date information, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability of the content for any purpose. Visitors are advised to consult with qualified experts before making any financial decisions or taking any actions based on the information provided on this website.