- Thoroughly go through your spending from the past several months to see what you can afford as a monthly mortgage payment. Be sure to keep in mind the additional costs of homeownership you may not be used to as a renter such as homeowners insurance, property taxes, home repairs and maintenance, and property owners’ association dues if applicable.
- Figure out what you can afford for a down payment and other up front costs. Be sure to set aside some funds for moving expenses, and consider that if your landlord is holding a security deposit you may not receive it until several weeks after you move out.
- Keep some money in an emergency account for use in case of a large home repair. Your mortgage lender will also want to see reserves that will cover a few months of expenses in the event of an unexpected loss of income.
- Think through what you most want in a home and put together a list of priorities. Revisit the list throughout your home search as you may find that it changes once you start looking at available properties.
- Identify the most desirable areas to live in. Visit them at different times of day and different days of the week to get a feel for what it would be like to live there.
- Clear clutter as you pack. Anything you can get rid of is one less thing to move.
- Set a budget for settling into your new home. The cost of new furniture, window treatments, linens, and even little things like trash cans and drawer liners can really add up. You might want to add things slowly over time or take it room by room.
- Look at a wide variety of homes. One that doesn’t appear to have everything you’re looking for might surprise you.
- Keep an open mind about things like paint colors, and uninspired landscaping. You might score a bargain by seeing the gem with some ugly cosmetic details that can be easily changed.
- On the contrary don’t take on a project that is beyond your DIY abilities. Be wary of that great home that needs work, and be sure you have the time, resources, and expertise to complete it.
Additional Suggestions for First Time Buyers
Enlist some help from the experts.
Working with an experienced real estate agent and mortgage professional can help make the process go much more smoothly. Take the time to interview several candidates to be sure you feel good about the people you are trusting with this important transaction. Ask whether they are used to working with first time buyers and try to get a feel for whether they will explain each aspect of the process thoroughly.
Don’t rush it.
You might not find a home you love the first, second, or even third time out looking at real estate. You will likely live in your first home for three to seven years so it’s ok to be picky. At the same time you want to be realistic about what you can afford in your first home, and understand you might not find everything on your wish list.
Enjoy the process.
Try not to get caught up in the stress and have fun looking at houses, exploring new neighborhoods, and planning for your future!
Learn more in the Home Buyer & Mortgage Education Center.