Buying your first home is both incredibly exciting AND impossibly overwhelming. It is, after all, probably the single largest purchase you will have made to date—which is why I feel it’s so important to share these tips for first time homebuyers.

So much of it can, of course, be loads of fun. Daydreaming of the future life you’ll be stepping into as you visit various weekend open houses. Perfecting your Pinterest board — OK, boards — of home décor inspiration. Planning for the new pet who can now join your family unit and enjoy that expansive backyard. Bribing friends with overpriced pizza to come share in the memory making, packing tape in hand. In so many ways, this is an absolutely beautiful season of life. 

Then, there’s the nitty-gritty. Thinking about things like credit scores, mortgage rates, and negotiation tactics may be less than thrilling, but these considerations are key to successfully navigating the first-time homebuying journey from start to finish. 

Ready to take the leap?

Here are my TOP 10 TIPS for first-time homebuyers.

1. Calculate How Much House You Can Afford

It can be disheartening to spend your time scouring Zillow and falling in love with homes that are well outside of your price range and/or that cost well beyond a dollar amount the bank will let you borrow.

I recommend one of the following alternative approaches.

• Go to a few different lenders — a small local bank, larger bank, or direct mortgage lender — and get an understanding of what you are eligible to borrow. This will help you narrow down your search and will provide you with a connection to a lender when you’re ready to take action.
  
• Use a home affordability calculator to review your numbers and get an estimate on your affordability. Refer to Chase’s Home Affordability Calculator to run the numbers!

As a general rule of thumb, the percentage of your monthly house expense — including mortgage, real estate taxes, homeowners insurance, and utilities — ideally will run below 30% of your net monthly income. For example, if you bring in $10,000 per month, the goal would be to have your homeowner costs be no more than $3,000 per month. Otherwise, you will inevitably feel the financial pressure of homeownership.

2. Improve Your Credit Score

A lower credit score will make borrowing funds more difficult and more expensive. If you have the time and the opportunity to do so, I suggest putting in the work to improve your credit score prior to looking for a home more seriously.

3. Build Your Savings

One rookie mistake I see quite often is when first-time homebuyers have only taken their down payment into consideration when it comes to savings. 

In addition to a down payment, you should be prepared to cover the following:

• Closing costs (typically 2-5% of the value of the home)
• Moving costs
• Expenses associated with repairs, maintenance, furnishings, and home decor
• Roughly 3-6 months’ worth of expenses saved in an emergency fund to help create a buffer AFTER you purchase the home
  

Navigating the transition from renter to first-time homebuyer can be daunting! Building up your safety net will be the peace of mind you need when you become a homeowner.

4. Be Choosey with Your Realtor

You want to find a realtor who, first and foremost, you like and trust. You will be in near constant communication with this professional throughout your homebuying journey. 

A good real estate agent will make you feel seen and heard and will assist you during both the negotiation and closing process. You will want to find someone with experience in your ideal search radius to provide specific insights, such as pros and cons of certain neighborhoods and the caliber of local school systems. Your realtor will be an invaluable resource — choose wisely!

5. Pre-Qualify for a Home Loan

Once you are formally pre-approved for a loan, you will be able to place an offer on a home and act quickly. You don’t want your dream home to slip through your fingers while you are stuck waiting on your pre-approval letter! 

It’s important to note that although the bank will likely provide you with the maximum dollar amount that you are eligible to borrow, you do NOT need to borrow this lofty amount and probably should consider not doing so. 

It’s often best practice to borrow less and leave a little more wiggle room in your budget for spending or saving.

6.  Compare Mortgage Types and Rates

There are a variety of mortgages available with different requirements as it relates to the down payment.

• Conventional Loans are not guaranteed by the government but are some of the more popular options for homebuyers today.
• FHA Loans are insured by the Federal Housing Administration and allow for down payments as low as 3.5%.
• USDA Loans are guaranteed by the U.S. Department of Agriculture and are for rural homebuyers and may not require a down payment.
• VA Loans are guaranteed by the Department of Veterans Affairs and are for current and veteran military service men and women and may not require a down payment.

Learn more about these and other types of mortgages on the Blog. 

7. Practice Your New Commute

This one might sound unnecessary, but I highly advise you to take your morning and evening work commute for a test drive before making a final decision on buying a home to be sure you are willing to commit to that route on the daily going forward. 

A beautiful home is great, but if it comes with a 90-minute commute each way, spending less time with the people you love, is it still as great?

8. Negotiate with the Seller

Navigating the housing market requires smart negotiation strategies, especially in competitive conditions as we’ve been in recently where multiple offers can drive prices well above asking. However, as interest rates rise and demand shifts, buyers may have more room to negotiate. 

The key is to come prepared—research comparable home prices, understand the seller’s motivations, and be clear on your budget and priorities. You can strengthen your position by offering flexible terms, such as a quicker closing or covering certain costs, which can make your offer more appealing. 

Don’t be afraid to ask for concessions, whether it’s a price reduction, repairs, or closing cost assistance—especially in a cooling market. Working with a knowledgeable real estate agent can also give you an edge in crafting a strong yet strategic offer.

9. Select a Top-Notch Home Inspector

Do not overlook the importance of both hiring a home inspector and following through to ensure the job is done right. If there are major issues and concerns with the home, you WANT to know about these up front. Otherwise, they will become your future financial burden. (Take it from me, when we purchased our first home and spent $8,000 in the first month for a drainage system in our basement due to flooding…somehow it didn’t come up in that inspection.)

The home inspection is going to be your best opportunity to get insights into whatever structural and/or major home repairs are needed. Make sure they are thorough and detail oriented. 

10. Purchase Homeowners Insurance

Your lender will require you to buy homeowners insurance before closing on your home. This type of insurance covers the cost of repairing or replacing your home and/or personal items in the event of damage or destruction. You will want to get enough coverage to account for the whole home value and/or cost to rebuild the home in the event it is damaged beyond repair. 

Navigate Your First-Time Homebuying Journey with Ease

Follow these 10 tips to avoid common pitfalls, including: 

• Scrambling at the last minute to get your information together and put in an offer on a home.
• Settling for a less desirable alternative to your dream home because your lack of preparation has left you exhausted and disillusioned with the process.
• Feeling false pressure to buy in a competitive market where you aren’t certain about the facts and figures of where you stand, resulting in uninformed, rushed decision-making. 
• Purchasing a home with fewer check marks in the pro column aligning with the kind of lifestyle that will bring you the most joy.  

Save up, be intentional, and buy the house you can envision becoming your home. 

Ready to get out of your daydreams and into your dream house? I’ve got you covered. Contact me today to tell me about where you are currently on your journey to first-time homeownership and discuss which of my service offerings might be the best fit to get your finances in a position to make it happen!