Tips for First-Time Home Buyers in 2021: Your Best and Complete Guide

Tips for First-Time Home Buyers in 2021: Your Best and Complete Guide

But with these tips for first-time home buyers, you are certain to make the process really easy and before you know it, you’ll have the home of your dreams. 

tips for first-time home buyers

So you want to buy a house but maybe you’ve never done it before?

Maybe you don’t even know where to begin?

In today’s economy, buying a house can be scary and even overwhelming.

There are many things to consider when choosing the right home for you. Then the process that you will need to go through can be stressful for some.

This is why it’s so important that you do your research before you make any final decisions. And we’re here to help.

In this article, we will explore some tips for first-time homebuyers that will help you in getting the house that you want this 2021.  

Things to Consider

Homebuying can be considered like many big projects.

And as they say with big projects like this, “the devil is in the details.”

This means you need to consider all the details you want to be aware of so that you know the process, save money and be successful overall in buying your first new home. 

Preparing to Buy

If you are preparing to buy a house, there are things we suggest you do first so that you are prepared and don’t get caught with your pants down.

This will ensure success and hopefully will take away some of the guesswork involved.

This will also help make house buying a lot more smoother as well.

tips for first-time home buyers

Save Early

If there was anything that home buyers should do before they even get in touch with an agent or lookup houses is to actually save for it.

In most cases, you would need to put a down payment for a house, then you would pay monthly dues.

Saving will help the process better and make it easier for you.

This can mean smaller monthly payments and a shorter time frame of payments.

You have to take note of the following that you need to save for:

  • Down payment. Most houses that are up for purchase often need to have some sort of down payment as part of the transaction. Depending on the payment terms with the house owner or with the bank, the down payment can be a huge percentage of the total price of the house or as low as 3% of those with excellent credit scores.
  • Closing costs. There are often fees and expenses that you need to pay needed to finalize a mortgage and can be a range of between 2 to 5%.
  • Move-in costs. Remember that you will also have to spend some money moving into the new home including possible home repairs, upgrades, or interior design and furnishings.

Figure Out Your Budget 

You need to understand how much you are actually willing to spend to buy a house.

The price range you are looking at should be based on your current personal income, the debt that you have, how much down payment you are willing to pay, your current credit score, and where you plan to live.

All of this will influence how much money you can spend and the kind of home you can buy.

Check Your Credit Score

tips for first-time home buyers

Your credit score will determine whether or not you are able to actually open a mortgage and what kind of interest rates that you can get.

Lower credit scores can result in you being disapproved of a mortgage or getting really high interest rates. 

Get a copy of your credit report from the three credit bureaus – Experian, Equifax, and TransUnion, dispute any errors that could hurt your score, make sure to pay on time and keep credit card balances low, and make sure to track every transaction.

Following this will help you get a better credit score and higher chances for good payment terms.

Tips in Mortgage Selection

Next, what’s important is you know what are the available options and programs that you can sign up with to buy a home.

There are many options available so you will need to research what is best for you.

Explore Mortgage options

As there are a variety of mortgages available, you need to take a look at the variety of payment terms from down payments to eligibility requirements.

The mortgage options available include:

  • Conventional Mortgages. These are conventional loans often offered by banks. They usually target first-time home buyers and require as little as 3% down payment. These, however, are not guaranteed by the government.
  • FHA Loans. These loans are insured by the Federal Housing Administration and may have down payments as low as 3.5%.
  • USDA Loans. On the other hand, these loans are guaranteed by the Department of Agriculture and are targeted at rural home buyers, and do not require a down payment.
  • VA Loans. This last kind of loan is guaranteed by the Department of Veteran Affairs and is available for current and veteran military service members and usually does not need a down payment.

You will also have to select the kind of mortgage terms.

Most homebuyers opt for a 30-year term that has an interest rate that stays the same but others may choose a shorter term with a 15-year term but payments are usually larger per month.

First-Time Home Buyer Assistance Program

Most states and some cities offer a first-time homebuyer program that allows these buyers to get assistance in making payments for a new home that combines low interest rates with down payment assistance.

Some first-time homebuyer programs also accept tax credits.

Do a Mortgage Rates and Fees Comparison

Most people don’t know that you can do a shopping comparison on mortgages but you definitely can because not one single lender is offering the exact terms with other lenders.

The Consumer Financial Protection Bureau recommends that you get a quotation for the same type of mortgage from multiple lenders so you can shop for the best rates. 

Get a Pre-Approval Letter

A preapproval letter shows a lender’s offer that they are willing to loan you a certain amount for a house purchase.

This shows real estate agents and home sellers that you are a serious buyer and gives you an edge over other home buyers that have not done this yet.

It is best to apply for a preapproval when you are ready to start shopping so that you can be ready. 

Home Shopping Tips

When you are now in the home shopping mode, you also need to consider the following tips as this will give you an edge over other home buyers. 

Select a Real Estate Agent Carefully

tips for first-time home buyers

If you want to get the best deals that meet your needs and help you in the negotiation process and closing the sale, you will need a good agent.

Interview some agents, get referrals from other recent homebuyers, request references, and ask about their experience helping first-time home buyers.

Look for the Right House and Neighborhood for You

You need to be sure what kind of house you want before you do your search.

Are you in the market for a condominium, townhouse, or single-family home?

Your neighborhood is something to consider as well. Are you interested to stay within the city, downtown, suburbs, or rural areas?

You may even consider if you want to be in a planned or gated community?

Consider as well the quality of the home.

Do you want something brand-new or something old or what they call fixer-uppers?

All of this will affect the price of the houses you can get and what is inside and outside your budget.

Stick to Your Budget

Make sure to stick to your budget.

You may be tempted to go over budget to get what you want or your lender may offer something more than what is comfortably affordable.

But this can cause financial stress down the road so make sure to stick to the budget range and don’t stray from it.

This allows for some wiggle room in the future.

Maximize Open Houses 

Make the most that you can with open houses.

They are great ways to really explore what houses look like beyond pictures.

Nowadays with the current COVID-19 pandemic, many houses on sale also have online 3D home tours so you don’t have to leave the comfort of your own home. Go through the tour, check out the place and see if it’s the right fit for you.

Tips in Finalizing a Home Purchase

tips for first-time home buyers

Now that you’ve selected the home you want, you will want to get the best price and the best experience in finalizing your purchase.

You will want to make sure that as a first-time buyer, you get the best deal.

This is how you’ll do it.

Pay for a Home Inspection

It is important that a home inspection is done to make a thorough assessment of the structure and mechanical systems.

Professional inspectors can check for the structural integrity of the home and give you information that will let you decide if you are getting a good deal.

Inspectors can check for things like mold or pests or any problem spots that could potentially need repair or even renovations. 

Negotiate With the Seller

One way to save some money is by negotiating with the seller.

This can mean the actual price of the home or by asking the seller to pay for repairs the home may potentially need.

You can ask the seller to pay some of the closing fees.

Work with your real estate agent to understand the local market so you can make proper negotiations.

Home Insurance

tips for first-time home buyers

Make sure to buy homeowners insurance before you actually close the deal on the home purchase.

Most lenders require it and it will pay for itself in the long run especially if there are damages or home accidents that need to be taken care of.

Final Thoughts

Home-buying can be a daunting task at first.

But with these tips for first-time home buyers, you are certain to make the process really easy and before you know it, you’ll have the home of your dreams. 


Author: John Benares

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