Things to Know as a First Time Home Buyer

Mistakes are learning opportunities, but it’s safe to say that buying a home is something you’d want to get right the first time. Buying a home can be complex, but with these tips for first time home buyers you’ll gain a better understanding to make a decision for this new commitment. Many of the common challenges first time home buyers face can be minimized, or even completely avoided, with some basic know-how. Ready to get started?

Budget Before Anything Else

One of the most important first home buyer tips is to start a budget. As soon as you decide you want to take the leap into home-ownership, it’s time to start planning your finances. A mortgage payment isn’t the only thing you’ll need to remember every month. There are a ton of other costs and considerations unique to home-ownership. Consider spending ample time to figure out your expenses and use a budget calculator to help. You need to have a sense of these costs and where they fit into your future budget because the last thing you want is to buy your dream home only to discover that you can’t actually afford it.

Maintain Your Credit

Credit can be overwhelming, but it can also be a huge asset going into the home buying process. A good credit score can increase the likelihood of qualifying for a mortgage because it indicates to the lender that you’re more likely to make timely payments on your loan. As a first time home buyer, working on improving your debt-to-income ratio is a difficult process but it goes hand in hand with improving your credit. Continue to make payments on bills and avoid late or missed payments as those will appear on your credit report.

Understand the Hidden Costs of Home-Ownership

Gaining an understanding of the typical cost of living in a home will put you in a better position moving forward as a first time home buyer. Home-ownership is one of the biggest things you can do and it includes several costs to upkeep a home. Here’s a list of nine out-of-pocket costs associated with buying a new home you may not have expected.

  1. Moving fees: Depending on how far you may be moving, getting the help of professional movers may impact your budget. If you’re looking to save, which is great, DIY is the way to go!
  2. Homeowner association fees (HOA): This can be a fee that occurs monthly or annually which would go toward the neighborhood to upkeep, looks and any repairs.
  3. Mortgage insurance (PMI or MIP): This protects the lender just in case you default on the conventional loan. This is typically only needed for those who may only put less than 20% for a down payment.
  4. Homeowner insurance (HOI): This is a type of hazard insurance covering any losses to your property or liability coverage from accidents that occur on your property.
  5. Maintenance and home repairs: You may come to find out your home needs repairs, which can be a big cost if they’re unexpected. The best way to avoid high costs from unanticipated repairs is to have a home warranty plan. While you’ll have to pay an annual premium for a plan, the benefits can far outweigh the repair costs.
  6. Utilities: If you’re moving from a smaller space, you’ll have to pay a bit more for living in a house with more square footage. Electricity, gas and water will be part of your monthly cost. Keep in mind you may have to pay upfront to have the services started.
  7. Home cleaning: Up keeping your home can be costly when it comes to buying supplies, but it’s also necessary. A good way to keep your home clean is by organizing a house cleaning schedule. Whether you do it yourself or reach out to  professionals to assist, this will create a happier and healthier environment.
  8. Property taxes: This expense will vary with the location of the home and can be included within the mortgage fee. You can find this while online home shopping or inquire with a realtor as they can give you tips as a first-time home buyer on how to find the most accurate information.
  9. Closing cost: This comprises all fees associated with closing on a home, including appraisal fees, title insurance, interest, and broker fees. Could range between 3 – 5% of the purchase price.

List Your Priorities, Then Your Non-Negotiables

A well-planned, non-negotiable list with flexible options is important to finding the house you desire. A real estate agent would suggest having an open mind for properties outside your initial wish list while maintaining the one or two points that cannot change to keep the home shopping search on track.

Work With an Experienced Realtor

As a first time home buyer, you may want to outsource particular information that an experienced real estate agent can provide to make the process less stressful. A great real estate agent will guide you through the home search with an unbiased eye, helping you meet your buying objectives while staying within your budget. Agents are also a great source when you have questions about local amenities, utilities, zoning rules, contractors, and more.

Set Aside the Money for a Down Payment and Closing Costs

As a home buyer, it’s your responsibility to cover the down payment and closing costs. If you’re working with a real estate agent, they can provide you with tips for first time home buyers. For instance, they can mention that there are down payment assistance programs that may be able to help you cover some or all of the down payment, and some programs offer help with closing costs. How much you choose to pay will be contingent on your specific situation.

Your first home is a big purchase – maybe even the biggest one you’ll have ever made up to this point in your life! Gaining an understanding of these tips for first time home buyers will make the process much easier. Buying a home can be complex, but it can be a good financial and personal decision if you’re ready for the commitment.

 

About Woodard Cleaning & Restoration

Woodard was founded in 1946 by Earl and Nancy Woodard. Today, their grandson, Justin Woodard, is the third-generation president and CEO. Located in St. Louis, Missouri, Woodard began as a cleaning company and expanded to offer fire and water mitigation, mold remediation and reconstruction, as well as board-up, smoke restoration and hard surface cleaning. Woodard has the most capable employees in the industry! With a mission of Helping People Get Back to Their Lives, Woodard serves both residential and commercial clients in the greater metro area. Woodard takes pride in investing in their employees and is recognized by the St. Louis Post Dispatch as a Top Workplace. For information or questions submit a form online or call us at 314-227-3932.

Follow us on FacebookInstagramPinterest, and Twitter.

Updated 1/24/2022