You’ve heard the old saying.

Fail to plan, plan to fail

Here at Mortgage 1 Brighton, we aspire to equip you with the information necessary to succeed at buying your new home. That’s why we’ve provided you with this list of 17 first time home buyer tips.

Handing over house keys

Buying a new home doesn’t have to be an intimidating process. With the following information in mind, you’ll be set up for success. We’re all about saving your sanity. In finding yourself better prepared to tackle the twists and turns that come with buying a home, you can avoid some costly mistakes.

17 First time home buyer tips: save your sanity and avoid costly mistakes

So let’s look at those first time home buyer tips. If you’re not going into this home purchase alone, it’s a good idea to sit down over a cup of coffee with your special other. This will ensure you are both on the same page when it comes down to signing papers and making decisions.

Communication is key in any big life decision like buying a home.

1 – Pay off your debt

If you have time to pull this off, you’ll be in a good place.

You know those credit card payments you haven’t exactly been pushing hard to pay off? Well, the time to pay them off is well before you buy your home. The sooner you pay them off, the better.

In the event of unforeseen expenses that may come your way after purchasing a home, you’ll be relieved that you paid off your debt. Aside from the mortgage, it’ll be one less financial burden weighing on you.

Also, take note that opening credit accounts just before you look into a lender will raise red flags. If you want to deposit a large sum of money into your checking or savings, do it at least two months in advance

2 – Preparedness means an emergency fund

Another important tip is to save up for an emergency fund before you buy a new home. If you can make this happen, you’ll be a step ahead in dealing with disasters that come your way.

Squirreling away money for an emergency fund won’t be easy, but it’s worth the sacrifice. You may open up a savings account earmarked for the sole purpose of dealing with any emergencies that arise later on. See about setting your bank account up to automatically funnel funds to that account on a monthly basis.

Although it’s rewarding, being a homeowner is no walk in the park. Basements flood, air conditioners go out — it’s just a normal part of home maintenance.

3 – Now is the time to start saving for a down payment

So we’re on a roll here with our first time home buyer tips. Notice a recurring trend? We’re a fan of saving, that’s for sure. But it’s up to you to determine the best plan according to the financial situation you’re in. The time is now to start saving up for that down payment.

4 – Know what you need for a down payment

But what’s your savings goal?

It’s often assumed that a homeowner will put down 20%, but that’s not always the case. Some first-time homebuyer programs allow you to put as little as 3% down. Start saving up any work bonuses and tax refunds toward your down payment. See about setting up your bank account to send money from your checking to savings account for that purpose.

Try this down payment calculator to figure out what you might expect to pay. It’ll help you determine the best course of action in your savings spree.

5 – Come up with a budget

So let’s talk about your dream home. How much can you budget for your home purchase? After you’ve acquired your pre-approval amount from the mortgage company, you can better plan your budget.

Calculator app on mobile phone

You don’t want your monthly housing costs to exceed 25% of what you bring home each month in salary. Don’t just think terms of what you were pre-approved for. Shop below your pre-approval amount as that number is the highest you are allowed to go. You’ll want to keep other expenses in mind as you budget. What monthly payments will be required of you as a homeowner? Insurance? Taxes?

Having a budget you can afford to work with is important. You don’t want to find yourself in over your head with this new home of yours. Before you get psyched over the homes you look at, you should have a financial plan set.

6 – Don’t deviate from the budget

Here’s another nugget in our list of first time home buyer tips. It’s an obvious point, we get it. But in practice, many of us fail. Stay motivated, stick with your budget. You’ll be glad you did when it’s all said and done. Going above your budget could place you in a sticky situation. It could burden you with financial regret.

You got this. Make an agreement with your special other so the budget is a plan for success. And that plan should keep you on the straight and narrow path!

7 – Plan for closing costs

While you budget for your new home, don’t forget to plan for the closing costs. Are you prepared to handle them? You don’t want to be hit unawares by the money that goes into a closing. These fees are associated with the purchasing process of your home.

When the sale is being completed, the closing fees come to the surface. Sometimes they are covered by the buyer, other times they are covered by the seller.

Fees to be expected at closing may include but are not limited to: the application fee, appraisal, attorney fee, closing fee or escrow fee, courier fee, credit report, escrow deposit for property taxes and mortgage insurance, FHA up-front mortgage insurance premium, flood determination, life of loan coverage, home inspection, homeowners association transfer fees, homeowners’ insurance, lender’s policy title insurance, lead-based paint inspection, loan discount points, owner’s policy title insurance, origination fee, pest inspection, prepaid interest, private mortgage insurance, property tax, recording fees, survey fee, title company title search, transfer taxes, underwriting fee, and the VA funding fee.

8 – Think about the future

Get a home that you can grow into. Where do you hope to see your family in four to five years? Are you hoping to have any new family members added? If you can plan ahead with reasonable means, you’re basically a step ahead of what could be coming your way.

Are you married? If both you and your spouse are working, do you intend to drop to one income when kids arrive on the scene? If so, can you handle the home-related payments?

Do you foresee multi-generational living in the forecast for your family? Think about the home layout as you do your house hunting. Is it suitable for such home changes?

Are you prepared to deal with the maintenance required of you? Some homes, depending on their structural materials and landscape, are higher maintenance than others.

How about access to schools, shops, and the like? Is the distance from your home something you’ll be OK with five years from now?

9 – Get someone to watch out for your interests

Did you know that a buyer’s representation doesn’t cost you a penny? That’s right. And it’s a good idea to have someone who’s up to bat for you, looking out for your best interest in such a big milestone.

Two men discussing costs

The purchasing of a house can be a little tricky if it’s your first time. For a first time home buyer, having someone to look out for your best interests can prove an invaluable asset.

As far as the expense of having a buyer’s representative on your side, it’s the seller who will flip the bill. The seller and buyer agents get a commission from the sale of the home.

10 – Write down contingencies

Once you’ve found your home and you’re ready to sign the paperwork, be sure that contingencies are taken into account. You want to be able to pull out of the agreement if the home inspector finds some problems you weren’t expecting.

These contingencies will allow you to cancel out on the agreement to buy the house if the house is found to not meet the qualifiers agreed on.

11 – Get pre-approved before you shop

Long before you start hunting around for your dream abode, you should get pre-approved. In relation to mortgages, pre-approval is a commitment from the lender to the possible borrower.

You should know that there are still conditions to be met after pre-approval. The lender isn’t just going to let you run with the funds to purchase any home.

Before you begin shopping around for a home, you should get pre-approved. By seeking pre-approval ahead of time, you will buy yourself time to correct credit issues that may arise.

It will also help you hone down your housing options. Rather than shopping blindly, later to find that you’ll be disappointed, pre-approval will give you an idea of your price range.

Getting pre-approval will also expedite the closing process.

12 – A home inspection is a must

You’ll want to get the home inspected. The home inspector will look for problems like mold and water damage, ensuring that your home is going to meet your expectations. He may find things that are deal breakers to you, he may not.

13 – Should you even spring for a home?

Is buying a home truly a good idea for you at this time in your life? Only you can answer that question. There are numerous responsibilities that come with being a homeowner.

14 – It doesn’t hurt to negotiate

As you shop around and whittle down your home options, don’t forget that you have the power of negotiation at your side. If you feel intimidated by the idea of negotiating, there are two things to consider.

First, what’s the worst thing that can happen? The seller can either turn down your offer or come back with a counteroffer.

Second, what’s the best thing that can happen?

You have nothing to lose and everything to gain! So why not try and negotiate for a lower cost?

15 – Research your home insurance options

Now, how about going the extra mile and researching your home insurance options? Don’t just go for the first option you come across. Call up various insurance companies. Take notes and compare. Don’t forget to talk to friends and read online reviews so you get an idea of what their customers think.

Woman writing on a notepad in front of her laptop

16 – Find out your credit score

Let’s talk about that credit score. Before you buy a home, you would do well to find out your credit score. Your credit score will affect your interest rate and loan terms. It will also play a key role in whether or not you are qualified for a loan.

If your credit score isn’t where it should be, then maybe you should work on that before you try to dive into a home purchase.

17 – Be specific about what you want

Now for the last of our first time home buyer tips. Know what you want and be specific about it. As you work with a real estate agent, specifics will go a long way in helping them do their job.

Their job is to help you find the perfect home to meet you and your family’s needs.

It’s key that you delineate a difference between your wants and your needs. This will help your real estate as he or she searches out homes to send your way.

You want your agent to not waste time sending you homes that are deal breakers to you. And you don’t want them to bend over backward unnecessarily trying to find a home that fits everything down to a T.

Don’t forget to stop and smell the roses

So to all you first-time buyers, this list is for you. These first time home buyer tips will prove helpful in finding and acquiring your new home!

Buying a home can feel a bit overwhelming if it’s your first time. Do what you can to keep it low stress. After viewing a house, sit down around the kitchen table and review the options with your spouse. Communication is king throughout the process.

It’s your first house so of course, you should enjoy the journey! It’s something to celebrate!

If you’re interested in getting pre-approved for a mortgage, apply here. We’ll help you get started!

We wish you the best. Happy house hunting to you and yours!