by Victoria 

Tips for the First Time Home Buyer


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With 14 years of working with countless clients, I'm on a mission to empower women and millennial's to take control of their finances, build wealth confidence, and achieve financial independence. 

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written by: victoria mcgruder, cpa, cpwa®

Buying your first home is an incredibly exciting process but it can also be a very stressful one as it is likely the single largest purchase you’ve ever made, and perhaps will ever make. These first time home buyer tips will help you navigate the home buying experience from start to finish!

Things to Consider Before More Seriously Looking For a Home

Before more seriously starting your house hunt, please refer to the below tips to help you best prepare for the process.

1. Determine What You Can Afford

There is simply no use in searching for hours on Zillow for homes that are well beyond your price range and/or that are well beyond what the bank will let you borrow. I know many of us do this for fun, but it can be a disheartening and frustrating experience if you believe you can afford something when in reality, you cannot.

You can either…

  1. Go to a few different lenders, whether it be 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.
  2. 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 – mortgage, real estate taxes, homeowners insurance and utilities should 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. Anything higher than that and you will inevitably feel the financial pressure of homeownership.

2. Review/Improve Your Credit Score

If your credit score is low, this will make borrowing funds more difficult and more expensive. If you have the time and the opportunity to do so, I would suggest spending the time to boost your credit score prior to borrowing and more seriously looking for a home.

3. Ensure You Have the Savings to Support the Purchase

Often times the first time home buyer will focus solely on the downpayment as their need for cash. But it’s not just the down payment that you need to consider but also….

  • Closing costs – which typically run about 2-5% of the value of the home
  • Moving costs
  • Expenses associated with making this new house your home – painting, repairs & maintenance, furniture, home decor, etc.
  • And ensuring that after all that, you still have roughly 3-6 months worth of monthly expenses saved in an emergency fund. That emergency fund WILL, without question, be used as a homeowner.

Make sure that you take these expenses into consideration because they will account for thousands of additional dollars spent in excess of the downpayment and you will want to be financially prepared for those costs!

What to Consider When You Start the House Hunt

Now you are more financially prepared and your financial expectations are in line – let’s start the house hunt!

4. Thoughtfully Choose a Realtor

You want to find a realtor that first and foremost, you like and trust. You will be working with your realtor continually throughout your homebuying journey – daily communication, potentially multiple times per day.

A good real estate agent will guide you in finding the right home for you and will assist you during both the negotiation and closing process. You will want to find someone that also has significant experience in the area you are currently searching within.

They can provide you with insight around certain neighborhoods, school systems, pros and cons about the specifics of the area which will be helpful as you navigate where you want to be.

Your realtor will be an invaluable resource to you while looking for a home – choose wisely!

5. Get Pre-Approved for a Loan

Once you get formally pre-approved for a loan, you will be able to place an offer on a home and act quickly. The last thing you want is to find a home you love and then have to go search for a bank to work with and wait for them to provide you with a pre-approval letter to then realize that a business day or two has gone by and the homeowner already accepted an offer from someone else.

Note: The bank will likely provide you with the maximum number that you are able to borrow. You do not NEED to and it’s likely you probably should not go all the way to the maximum amount you can borrow as it may leave little wiggle room for spending or saving.

6. Compare Mortgage Types & Rates

There are a variety of mortgages available with varying 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 home buyers today.
  • FHA Loans – insured by the Federal Housing Administration and allow for down payments as low as 3.5%.
  • USDA Loans – guaranteed by the U.S. Department of Agriculture and are for rural home buyers and may not require a down payment.
  • VA Loans – 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.

Refer to a previous blog post to learn more – 7 Mortgage Types for Home Buyers

7. Practice the Commute

If you have to travel back and forth from home to work – practice the commute. Go at different times of day. Practice the commute that you are about to sign up for for the foreseeable future. Be sure you are willing to commit to that daily commute going forward.

What to Consider After You Put in an Offer

8. Negotiate with the Seller

This market over the past 2 years has been a difficult one for the home buyer. In many markets around the country, you haven’t had much opportunity to negotiate as the offers were coming in from every angle well over asking price and giving the seller very little reason to have to negotiate at all. A tough market especially for the first time home buyer.

But as interest rates rise, the rush for home ownership will likely fall. This will hopefully provide home buyers more of an opportunity to navigate their needs and negotiate with the seller as opposed to jumping into something as quickly as possible to not miss out on an “opportunity.”

9. Be Selective in Your Home Inspector

You want this job to be done thoroughly. If there are major issues and concerns with the home, you WANT to know about them because they will ultimately become your problem and financial burden. You have to understand what you are walking into. The home inspector is going to be your best opportunity to get insights into these structural, major home issues/repairs, etc. that are needed.

10. Be Prepared With Home Insurance

Your lender will require you to buy homeowners insurance before closing on your home. Home insurance covers the cost to repair or replace your home and/or personal items in the home in the event of damage or destruction. You will want to get enough coverage to cover the whole home value and/or cost to rebuild the home in the event it is completely destroyed.

One Last Consideration for the First Time Home Buyer

One of the most common things I’ve seen over the last 5 years in home buying is individuals scrambling to get all their information together – rushing to put in an offer – a willingness to settle for a house because another one didn’t work out…and feeling a significant sense of pressure to buy.

As if once they have set their minds to wanting a home…they simply have to have one, any one, even if it wasn’t aligned with the things they really wanted.

If we are talking about your principal residence – the home you are going to live in….Don’t just buy something to be a homeowner. Save up, be intentional, and buy the home you want, the house you can see yourself making a home out of. Home ownership is expensive and it is not always the answer for everyone.

Refer back to these tips when you start your first time home buyer journey or really any home purchase in the future!

Be sure to share this article with your friends to help them navigate the home buyer process!


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7 Types of Mortgage Loans for Buyers

A Letter to the First Time Home Buyer

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I'm a financial advocate, coach, and blogger on a mission to help you build wealth with confidence! 

Having worked closely with countless clients over my 14 year career, I've gained a very deep understanding of money management and effective planning strategies in guiding individuals and families towards financial success. Now, I want to share that wealth of knowledge and insight to empower YOU to take control of their finances, make well-informed decisions, and create a life of abundance without the stress of finances looming over you. I'm so glad you're here! 

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