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New to the world of homeownership? We’ve got you covered!

Check out our guide for first-time homeowners, filled with tips, advice, and everything you need to know to make your new house feel like home.

1. Be Sure You’re Ready To Commit To A Loan

The No. 1 tip that we can offer first-time home buyers is to be sure you’re ready. The average mortgage loan term is 15 – 30 years. Although you don’t need to stay in your home for that long, buying a house is still a major commitment. Be 100% sure that you’re ready for homeownership before taking on a mortgage.

2. Don’t Skip The Preapproval

It’s a really good idea to get a mortgage preapproval before you begin comparing properties.

Knowing how prequalification differs from preapproval is also important. Let’s review that difference now.

• Prequalification letter: A prequalification is an estimate of the amount of home loan you can get. It’s based on an informal evaluation of your income and other information.

• Preapproval letter: A mortgage preapproval is an official document from a lender that tells you exactly how much loan money you can get based on your financial information, such as W-2s, bank statements and your credit score.

3. Maintain Your Credit

Now is not the time to open a new line of credit, like a credit card or a personal loan. When you apply for mortgage preapproval, lenders will pull your credit report. They’ll do it again before you close on the house and its corresponding mortgage.

4. Save For A Down Payment

One of the most important priorities of the Federal Housing Administration (FHA) is helping home buyers with the purchase of their first home, and this includes assisting borrowers with their down payment. If you qualify as a first-time home buyer, you may have access to state programs, tax breaks and an FHA loan.

5. Understand Your Loan Options

Did you know that you can decide between multiple types of mortgage loans? The type of loan you choose will determine your down payment amount, the type of home you can buy and more.

6. Don’t Forget Closing Costs

Don’t assume that your down payment is all that you’ll need to close on your mortgage loan. You’ll also need to cover closing costs before you take control of your property.

Closing costs are upfront expenses that go to your lender in exchange for arranging certain loan services. 

7. List Your Needs, Nonnegotiables And Nice-To-Haves

Your reason for buying a home will be your north star for making decisions about your purchase. Once you’ve decided on the type of home that’s right for you, you can begin to prioritize which features you want in your home based on your needs.

8. Work With A Real Estate Agent

Work with a real estate agent or REALTOR® to find the perfect property. Agents and REALTORS® are local professionals who are experts in the home-buying process and your local market.

9. Be Confident When You Submit An Offer

You should never submit an offer on a home unless you’re 100% committed to the purchase – or you could risk losing your earnest money deposit, also known as a “good faith deposit.” Giving this money signals to the owner that you’re serious about the offer.

10. Hire An Inspector

You need to hire a professional inspector before getting a home. An inspection is different from the appraisal required by your lender. Here’s how:

• The appraisal: During an appraisal, your appraiser only gives you and your lender a rough idea of how much your home is worth based on comparable properties (comps).

• The inspection: During a home inspection, the inspector tells you about specific problems with the property. 

11. Stick To Your Budget

Don’t go over your budget for a house, even if the house seems perfect for you. Be sure to budget in enough money for repairs and renovations. 

12. Save Physical Copies Of Your Paperwork

Yes, cloud-based storage is the obvious choice for keeping tabs on documents, but you should keep a physical copy of your mortgage statements, deed, Closing Disclosure and other documents in a locked, fireproof file cabinet.

13. Don’t Stop Learning

Investing in homeownership education can help you avoid making costly mistakes, prioritize smart investments that offer reliable ROIs, and build sweat equity in your first home.

Share this blog with a friend who recently became a homeowner! 🏡💪