It’s often a long road from your first home to your dream home, but that doesn’t mean the journey has to be painful or complicated. While buying real estate can seem intimidating, there are steps you can take to make sure the process goes smoothly and ends with you owning the home of your dreams! Here are some tips on how to buy your first home.
Choose a location
When it comes time to buy a home, you’ll want to make sure you choose one that is right for you. For example, if you work long hours and are rarely at home, a quiet cul-de-sac in an upscale neighborhood may not be for you. On the other hand, if your family enjoys spending time outdoors, a house with a backyard and nearby parks might fit better. Keep these things in mind when choosing where to purchase property.
Save up for a deposit
Saving up for a deposit can be a long, hard process if you’re looking to buy a house. But once you have enough cash together, buying a house won’t feel so far out of reach. The best thing you can do when saving for a deposit is build good savings habits. That means setting aside money from each paycheck in an account that you don’t touch until it’s time to put down a deposit on a house. If it helps, set up an automatic transfer from your checking account into your savings account—this way you won’t even notice that it’s gone!
Shop around for mortgages
When it comes time to apply for a mortgage, don’t apply for the lowest mortgage (which might come with higher interest rates and fees). Work with a bank or other lender that specializes in mortgages, like Quicken Loans or Wells Fargo. Getting multiple quotes will ensure you get the best possible deal for your personal situation.
Before you start looking at houses, you’ll want to get pre-approved for a mortgage. Having a pre-approval letter from a lender makes it easier and faster for you to find and purchase a house. Get started by searching online or calling local lenders—most can issue pre-approvals within a day or two, as long as they have information like your income and credit history. Check out our how-to guide on getting pre-approved here.
Learn how to spot problems with homes
This is one of those duh pieces of advice, but it bears repeating: If a house has mold, it will be difficult to sell. This includes other types of structural damage that may not be visible with bare eyes (like rot or termite damage). And if you do see something that looks like it could become a problem in a year or two, let your agent know so he or she can discuss repairs with sellers. After all, even if they don’t fix it before closing, they’ll have to deal with it at some point down the road.
Understand closing costs and fees
When you’re starting out, it can be tough to grasp all of those little costs that come with buying a house. Closing costs, appraisal fees, administrative fees—they all add up quickly. Take time to understand these small charges so you know what to expect when it comes time for settlement. You’ll feel more prepared and confident when closing day rolls around, and you won’t get blindsided by anything new.